SOLUTION: The function C(t)=C(1+r)t models the rise in the cost of a product that has a cost of C today, subject to an average yearly inflation rate of r for t years. If the average annual

Question 1140502: The function C(t)=C(1+r)t models the rise in the cost of a product that has a cost of C today, subject to an average yearly inflation rate of r for t years. If the average annual rate of inflation over the next 2 years is assumed to be 3.5%, what will the inflation-adjusted cost of a $122,800 boat be in 2 years? Round to two decimal places.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
I think the formula should be C(t)=C(1=r)^t
if that is the case, C(2)(=C(1.035)^2=1.071225, and the boat would be $122,800*1.071225=$131,546.43
If linear, then it would be 1.07*122800=$131,396. Inflation inflates itself, so the first result should be the correct one.
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