Question

In 2010 an item cost $200. The price increase by 1.5% each year. How much wil it cost in 2030?

Round
your
answer to the nearest cent.

Answer 1

Explanation:

Let P be price after t year . From the formula of compounding

P = 9 (1.015)^t

Taking log to the base e on both sides

ln P = ln 9 + t ln 1.015

= (2.197 + .0149t )

P = e^{(2.197+.0149t)}