SOLUTION: How long will it take for prices in the economy to double at a 7% annual inflation rate? Use the exponential growth rate model P(t) = Poe^k^t.

Algebra ->  Exponential-and-logarithmic-functions -> SOLUTION: How long will it take for prices in the economy to double at a 7% annual inflation rate? Use the exponential growth rate model P(t) = Poe^k^t.      Log On


   

Question 313689: How long will it take for prices in the economy to double at a 7% annual inflation rate? Use the exponential growth rate model P(t) = Poe^k^t.
Answer by rapaljer(4671) About Me  (Show Source):
You can put this solution on YOUR website!
When prices double, the price of an item will be twice Po, and k=.07.
2Po=Poe%5E%28.07t%29

Divide both sides by Po:
2+=+e%5E%28.07t%29

Take the ln of each side:
ln+2=+ln%28e%5E%28.07t%29%29
ln+2+=+.07t
t=%28ln+2%29%2F.07
t=9.9 years approximately.


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