SOLUTION: The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c(x) = 1.03x. Find the cost of a $1500 refigerator in three years if the rat
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Question 981081: The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c(x) = 1.03x. Find the cost of a $1500 refigerator in three years if the rate of inflation remains consistant. Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c(x) = 1.03x. Find the cost of a $1500 refigerator in three years if the rate of inflation remains consistant.
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Start:: 1500
After 1 year:: 1500 + 1500*0.03 = 1500*1.03
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After 2 years:: 1500*1.03 + 1500*1.03*0.03 = 1500*1.03^2
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After 3 years:: 1500*1.03^3 = 1639.09
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Cheers,
Stan H.
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