SOLUTION: Suppose that the rate of inflation for the last four years was 3.9% per year. If a home costs $125,000 today, how much would it have cost 4 years ago?
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Question 750809: Suppose that the rate of inflation for the last four years was 3.9% per year. If a home costs $125,000 today, how much would it have cost 4 years ago? Answer by htmentor(1343) (Show Source):
You can put this solution on YOUR website! Let P0 = the original purchase price
Let P(n) = the value of the home n years after purchase
If the inflation rate is 3.9%, the value after n years is
Solve for P0:
After n = 4 years, P(n) = 125,000:
P0 = $107263
