Question

In problems 16-20, calculate the expected price in the year 2008 if you assume that there was a consistent 5% inflation rate and use the given 1988 price. answers should be rounded to the nearest penny. 16. median salary, $27,225 17. gallon of gas, $1.08 18. dozen eggs, $0.89 19. movie admission, $3.50 20. mcdonalds hamburger, $0.62

Answer 1

16. 72236.03 
17. 2.87 
18. 2.36
19. 9.29
20. 1.65
The exponential growth formula is as follows
$y=a(1+r)^{x}$:
a is initial value
($27,225 17. gallon of gas, $1.08 18. dozen eggs, $0.89 19. movie admission, $3.50 20. mcdonalds hamburger, $0.62)
r is rate of increase (0.05)
x is time (2008-1988 = 20 years)
to solve plug in values for each one.
$y=27225(1+0.05)^{20} = 72236.03$

$1.08(1+0.05)^{20} = 2.87$

$.89(1+0.05)^{20} = 2.36$

$3.50(1+0.05)^{20} = 9.29$

$.62(1+0.05)^{20} = 1.65$