Question 1042207: The 2006 price of a certain type of car is $24,600. Estimate the price of the same car in the year 2020. Assume a constant annual inflation rate of 2.2%.
Answer by Boreal(15235)   (Show Source):
You can put this solution on YOUR website! End=24,600(1+0.022)^14
The price would be 24,600*(1+0.022)^14. That is inflation of 2.2% each year compounded for 14 years. The 14 year is the time from 2006, presumably year 0, and 2020, year 14.
1.022^14 is 1.356. Without rounding, which I did here, multiply by 24600.
The answer is $33,361.66.
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