SOLUTION: How do you solve: If a fast food meal in 2006 cost $5.89, what is the estimated price in 2015 and 2025 if the inflation rate is 2%? Thank you!

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: How do you solve: If a fast food meal in 2006 cost $5.89, what is the estimated price in 2015 and 2025 if the inflation rate is 2%? Thank you!       Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 376392: How do you solve:
If a fast food meal in 2006 cost $5.89, what is the estimated price in 2015 and 2025 if the inflation rate is 2%?
Thank you!
Answer by robertb(5830) About Me  (Show Source):
You can put this solution on YOUR website!
It follows the compounded balance formula:B+=+P%281%2Br%2Fn%29%5E%28nt%29. Here P = 5.89, r = 0.02, n = 1, and t = 9. Then
B+=+5.89%281%2B0.02%29%5E9+=+5.89%2A1.02%5E9+=+7.04.
For t = 19, B+=+5.89%281%2B0.02%29%5E19+=+5.89%2A1.02%5E19+=+8.58.