Question

If the rate of inflation is 3.4% per year, the future price pt (in dollars) of a certain item can be modeled by the following exponential function, where t is the number of years from today.
pt = 2500(1.022t)
Find the current price of the item and the price 10 years from today.

Answer 1

Answer:

The answer is "3107.75".

Step-by-step explanation:

$\text{Rate of inflation} = \frac{3.4 \%}{year}$

$\to p(t)= 2500 (1.022)^t$

when t= 0  

$\to p(0) = 2500(1.022)^0$

           $= 2500 \times 1\\\\= \ 2500$

When t=10

$\to p(10)=2500(1.022)^{10}$

             $= 2500 \times 1.2431\\\\= 3107.75$