The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c (x) = 1.03x. Find the cost of a $1500 refigerator in three years if the rate of inflation remains consistant.

Question

Mathematics

Frida Hays

15 August, 07:16

The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c (x) = 1.03x. Find the cost of a $1500 refigerator in three years if the rate of inflation remains consistant.

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Roman · Answer 1

This is an expontential growth, which is a growth based on f (x) = b*a^x

b = 1500

a = 1.03

x = 3

f (3) = 1500*1.03^3 = 1639.10$

After three years the fridge would cost 1639.1$.