Question

The U.S Energy Information Administration reported that the average cost of residential electricity use in 2000 was 0.0824 per kilowatt hour. If the cost of a kilowatt-hour of electricity since 2000 followed the model y=0.0797(1.04) to the power of x, what is the expected cost of a kilowatt-hour of electricity in 2015? Round your answer to the nearest hundredth of a dollar.

Answer 1

Answer: The expected cost of a kilowatt-hour will be about 0.1435 in 2015.

We are given the equation for the change in price. It is an exponential equation. All we need to do is input 15 for x and evaluate the expression.

The work is:

y = 0.0797(1.04)^x
y = 0.0797(1.04)^15
y = 0.1435