The average home price in a certain area was $272,000 in 2010. In 2020, the average home price was $299,000. What is the rate of

Question

3 years ago

13

inflation? Round to one decimal place

1 answer:

lyudmila [28] · Answer 1 · 2022-10-28T03:07:04+03:00

Answer: 0.95%

Step-by-step explanation:

Use the future value formula to calculate this with inflation as the rate by which the amount is increasing.

Future value = Amount * ( 1 + r) ^ no. of periods

299,000 = 272,000 * ( 1 + r) ¹⁰

( 1 + r) ¹⁰ = 299,000 / 272,000

( 1 + r) ¹⁰ = 1.099

1 + r = ¹⁰√1.099

r = 1.009484 - 1

r = 0.95%