SOLUTION: A gallon of milk cost $1.99 five years ago, now it costs $2.89. a. Write an exponential function. b. what has been the annual rate of increase in the cost?

Algebra ->  Customizable Word Problem Solvers  -> Evaluation -> SOLUTION: A gallon of milk cost $1.99 five years ago, now it costs $2.89. a. Write an exponential function. b. what has been the annual rate of increase in the cost?      Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 442740: A gallon of milk cost $1.99 five years ago, now it costs $2.89.
a. Write an exponential function.
b. what has been the annual rate of increase in the cost?
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
A gallon of milk cost $1.99 five years ago, now it costs $2.89.
a. Write an exponential function.
y = ab^x
----
Initial cost:
1.99 = a*b^0
a = 1.99
-----
After 5-yr cost:
2.89 = 1.99b^5
b^5 = 1.4523
b = 1.0775
-----------------
Equation:
y = 1.99*(1.0775)^t
===========================

b. what has been the annual rate of increase in the cost?
Annual rate of increase = 0.0775 = 7.75%
==========================================
Cheers,
Stan H.