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Alenkinab [10]
2 years ago
7

If the present value of an item is P

Mathematics
1 answer:
lisov135 [29]2 years ago
6 0

inflation means, the same item costs more however is the same item, so if a tomato in January 1st costs $1 and by December 31st it costs $2, the price went up by twice, however is same tomato, it didn't become twice as large, anyhow, inflation eats away value and thus is a Decay case.

\qquad \textit{Amount for Exponential Decay} \\\\ A=P(1 - r)^t\qquad \begin{cases} A=\textit{current amount}\\ P=\textit{initial amount}\dotfill &100\\ r=rate\to 4\%\to \frac{4}{100}\dotfill &0.04\\ t=\textit{elapsed time}\dotfill &15\\ \end{cases} \\\\\\ A=100(1 - 0.04)^{15}\implies A=100(0.96)^{15}\implies A\approx 54.21

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