SOLUTION: Given the inflation model C(t)=C0(1+r)t and given that a can of soup that currently sells for $1.18 sold for $0.90 3 years ago, what has the average annual rate of inflation been f

Question 1198085: Given the inflation model C(t)=C0(1+r)t and given that a can of soup that currently sells for $1.18 sold for $0.90 3 years ago, what has the average annual rate of inflation been for the past 3 years? Round to two decimal places.
Answer by ikleyn(52787) (Show Source): You can put this solution on YOUR website!
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Given the inflation model C(t)=C0(1+r)t and given that a can of soup that currently sells
for $1.18 sold for $0.90 3 years ago, what has the average annual rate of inflation been
for the past 3 years? Round to two decimal places.
~~~~~~~~~~~~~~~~

From the problem,

    1.18 = ,    (1)


and they want you find the rate "r".  From (1)

     = 

    1.31111111 = 

    1 + r =  = 1.094493448.


Hence,  r = 1.094493448 - 1 = 0.094493448...


Round as you need . . .

Solved.

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