SOLUTION: Assuming a continous inflation rate of 3.680% how much did a $200 item today cost 11 years ago? If inflation continues but at a continuous rate of 2.910% how much will a $200 it

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Question 59082: Assuming a continous inflation rate of 3.680% how much did a $200 item today cost 11 years ago?
If inflation continues but at a continuous rate of 2.910% how much will a $200 item cost 5 years from now?
Answer by rcmcc(152) About Me  (Show Source):
You can put this solution on YOUR website!
We can solve this question using a=p%281%2Bi%29%5En to find the deflamatory rate
a=200
p=?
i=0.0368 of 1 as a percent
n=11 years
re-arrange the equation to isolate p
p=200%2F%281%2B0.0368%29%5E11
a=134.3956
so the amount at the start of the term is $134.40
we substitute in the same equation with the new percent, to find a in 5 years with the principle of 200 dollars.
a=p%281%2Bi%29%5En
a=200%281%2B0.0291%29%5E5
a=230.8436256
so the cost 5 years from now would be $230.85