document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=4918>Question 4918</A>: <I><SPAN STYLE=\"word-break: break-all;\"> The price of a refirgerator is $1,200.  If the rate of inflation in the next three year averages 3% per year and the real cost of the refrigerator remains unchanged in that time, what will the price of the refrigerator be in three years? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #2425 by </B><A HREF=/tutors/aboutme.mpl?userid=Abbey><B>Abbey(339)</B></A><img src=\"/images/stars/stars-10.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Abbey><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=2425\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the refrigerator currently costs 1200. \r<BR>\n" );
document.write( "\n" );
document.write( "Let's say this is 100% and we are in year zero<BR>\n" );
document.write( "In year one the refrigerator will be 103%(.03 times year one value + year one value)<BR>\n" );
document.write( "In year two the refrigerator will increase an additional 3%, BUT it is 3% of year one's value (.03*103+103)=106.09<BR>\n" );
document.write( "In year three, the refrigerator again increases 3% of year two's value, so it is (.03*106.09+106.09)=109.273%\r<BR>\n" );
document.write( "\n" );
document.write( "So if we multiply 1.09273 by the current cost, we see that the refrigerator will cost $1,311.27<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );