Invest 10,000 at (8% - 4%) less 45% tax leaves 2.2% per year. Net after 3 years = 10,675.

So an easy way to look at this is subtract the inflation rate from the interest rate to get your annual growth in savings - 8-4 = 4%. Taxes will take 8% x 0.45 = 3.6% of the growth --- therefore your money will on a after tax, inflation adjusted basis grow by 0.04% during the 3 year period

yes

I'm being trying to figure out this problem all day and it is doing my head in.

I invested $10000 for 3 years at a fixed rate of 8% compounded annually.Over the course of the 3 year period,tax rate is 45%, inflation has averaged 4% p.a.

Q. How many dollars do you need to have after paying tax and taking account of inflation not to have lost money on your investment?

I would like to know what exactly is inflation and each step taken to the answer.