Answer: D is the correct option
Step-by-step explanation:
We want to determine which of the given scenarios reflects an annual inflation rate of 3%.
To get the new or inflated price, we will find 3% of the former price and add it to the former price. Looking at the scenarios,
A) In year 1, the price of a computer is $325.00. Applying 3% increase, it becomes
(3/100 × 325) + 325 = 9.75 + 325
= $334.75. This is higher than the cost in year 2
B) In year 1, the price of a soda is $0.75. Applying 3% increase, it becomes
(3/100 × 0.75) + 0.75 = 0.0225 + 0.75= $0.7725. This is lower than the cost in year 2
C) In year 1, the price of a board game is $10.00. Applying 3% increase, it becomes
(3/100 × 10) + 0.75 = 0.3 + 10= $10.3. This is higher than the cost in year 2
D) In year 1, the price of a sofa is $500.00. Applying 3% increase, it becomes
(3/100 × 500) + 500 = 15 + 500= $515
It corresponds to the price of year 2
So the correct option is D
