The year 2010 prices of several items are given below. Find the estimate future prices required to fill the blanks in the chart.

Bruno Thompson

Bruno Thompson

Answered question

2022-07-29

The year 2010 prices of several items are given below. Find the estimate future prices required to fill the blanks in the chart.
I t e m 2010   P r i c e 2015   P r i c e   2 %   I n f l a t i o n 2025 P r i c e   2 % I n f l a t i o n 2015 P r i c e   11 % I n f l a t i o n 2025 P r i c e   11 %   I n f l a t i o n S m a l l   c a r 18 , 800
2015 Price 2% Inflation = $?

Answer & Explanation

Killaninl2

Killaninl2

Beginner2022-07-30Added 20 answers

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Price of small car is $ 18,800 in 2010
Now we can find future price in 2015 with 2% inflation.
We know future price A = P e r t
here P = $ 18 , 800 , r = 2 % = 0.02
time t = 5 years
so A = $ 18 , 800 e 0.02 × 5
A = $ 18 , 800 e 0.1
A = $ 20177.213
2025 , 2 %   i n f l a t i o n
so A = P e r t   h e r e   P = $ 18 , 800
r = 2 % = 0.02 t = 10 y e a r s
A = $ 18 , 800 × e 0.02 × 10 = $ 18 , 800 × e 0.2 = $ 22962.371
2015, 11% inflation
here p = $ 18 , 800 , t = 5 y e a r s , r = 11 % = 0.11
A = p e r t
= $ 18 , 800 × e 0.11 × 5 = $ 16 , 800 × e 0.55 = $ 32585.156
Step 2
2025, 11% inflation
here P = $ 18 , 800 , t = 10 y e a r s , r = 11 % = 0.11
so A = P e r t
= $ 18 , 800 e 0.11 × 10 = $ 18 , 800 e 1.1 = $ 56478.321So 2015 Price 2% inflation
= $ 20777.213

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