SOLUTION: Here is the problem:
A certain item costs $4.75. Due to inflation, experts estimate the cost will increase by 2% per year. Approximately how many years until the item costs $7.2
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Exponential-and-logarithmic-functions
-> SOLUTION: Here is the problem:
A certain item costs $4.75. Due to inflation, experts estimate the cost will increase by 2% per year. Approximately how many years until the item costs $7.2
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Question 960998: Here is the problem:
A certain item costs $4.75. Due to inflation, experts estimate the cost will increase by 2% per year. Approximately how many years until the item costs $7.20?
Do I use the growth formula to solve???
Q(t) = C * (1+r/t)^t
Solve for t to get the answer??? Answer by harpazo(655) (Show Source):
You can put this solution on YOUR website!
As it is not compounded in a year, the general formula will be FV = PV * (1 + r)^t
FV will be the future value where PV is the present value. r is the the rate (per year) and t shows the years.
7.20 = 4.75 * (1 + 0.02)^t
(1.02)^t = 7.2/4.75
ln (1.02)^t = ln (7.2/4.75)
t = ln (7.2/4.75) / ln (1.02)
t ≈ 21.004
=> after 21 years
Check this page please
http://www.calculatorsoup.com/calculators/financial/future-value-investment-calculator.php
If we enter the values P = 4.75, R = 2 and t = 21, the result will be 21 years. (m is 1 as the rate isn't compounded)
