Question 1111601
This a problem of compound Interest calculation

Cost of milk nowl P =	3.89									
Cost of milk after 10 years=	A									
years=n	10.00									
compounded	1	times a year		t						
Rate =	5.00			0.05						
Cost after 10 years =	P*((n+r)/n)^n*t									
										
Cost after 10 years =	=	3.89	*(	1+0.05	)^1	*	10
Amount =	3.89	*(	1	+	0.05	)^	10			
	3.89	*(	1.05	)^	10.00					
Cost after 10 years =	$6.34		

Cost  5 years	ago

Principal P =	3.89										
Amount=	A										
years=n	5.00										
compounded	1	times a year		t							
Rate =	-5.00			-0.05							
Amount =	P*((n+r)/n)^n*t										
											
Amount =	=	3.89	*(	1	+	-0.05	)^	1	*	5.00	
Amount =	3.89	*(	1	+	-0.05	)^	5				
	3.89	*(	0.95	)^	5.00						
Cost 5 years ago =	$3.01