SOLUTION: If the inflation rate were 4%, use the formula for continuous compounding to find the number of years, to the nearest tenth, for a $1 item to cost $2.

Question 815497: If the inflation rate were 4%, use the formula for continuous compounding to find the number of years, to the nearest tenth, for a $1 item to cost $2.
Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!

 

Hi,

Re reply:   2 = e^.04t  ,   ln2 / .04 = t,  t = 17.3 years 

If the inflation rate were 4%, How long before $1 becomes $2



 

  2 = e^.04t  ,   ln2 / .04 = t,  t = 17.3 years  

RELATED QUESTIONS

1. What annual interest rate, to the nearest tenth, will produce $5760 if $3500 is left... (answered by josmiceli)
An initial deposit of $36,000 grows at an annual rate of 8% for 24 years. Compare the... (answered by Theo)
A bank account starts with $700 and earns an annual interest rate of 6%. Use the... (answered by Theo)
Assume the cost of a loaf of bread is 4$. With continuous compounding, find the time it... (answered by solver91311)
The problem is:
Assume the cost of a loaf of bread is $4.  With continuous compounding,... (answered by stanbon)
What interest rate, to the nearest tenth of a percent, is required for an investment... (answered by addingup)
What interest rate, to the nearest tenth of a percent, is required for an investment... (answered by fractalier)
Assuming continuous compounding, what will it cost to buy a $35 item in 2 years at the... (answered by stanbon,Alan3354)
These questions have really got me stumped!  I dont understand some problems sometimes,... (answered by solver91311)