SOLUTION: The formula S=C(1+r)^t models inflation, where C = the value today, R = the annual inflation rate, and S = the inflated value t years from now. Use this formula to solve the foll

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Question 622296: The formula S=C(1+r)^t models inflation, where C = the value today, R = the annual inflation rate, and S = the inflated value t years from now. Use this formula to solve the following exercise.
Round your answer to the nearest dollar and make sure to include the dollar sign.
If the inflation rate is 5% , how much will a house now worth 780,000$ be worth in 3 years?
ANSWER: .
Answer by math-vortex(648) About Me  (Show Source):
You can put this solution on YOUR website!
Hi, there--
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We are given the formula
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S=C%2A%281%2Br%29%5Et
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where C = the value today,
R = the annual inflation rate, and
S = the inflated value t years from now.
.
Find the inflated value S, when
.
R = 5%
C = $780,000
t = 3 years
.
First, convert 5% to a decimal representation. 5% = 0.05
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Substitute the known values into the formula and solve for S.
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S=C%2A%281%2Br%29%5Et
S=780000%2A%281%2B0.05%29%5E3
S=780000%2A%281.05%29%5E3
S=780000%2A1.157625
S=902947.5
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I the context of this problem, S=902947.5 means that the inflated value of the house is $902,947.50. We are asked to round to the nearest dollar. Rules vary when the cents are exactly 50. I usually round up. Therefore the inflated value of the house os $902,948.
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Hope this helps! Feel free to email if you'd like me to explain any part in more detail.
.
Ms.Figgy
math.in.the.vortex@gmail.com