Question

The price of gourmet coffee beans at the corner market has increased 10% per year over the past several years if the current cost is $40 per pound what did a pound of gourmet beans cost two years ago

Answer 1

$20 because 10% of 40 is 10 and the price now is 40 so 2 years before would have been 20

Answer 2

Answer: $32.4

Explanation:

Given : The price of gourmet coffee beans at the corner market has increased 10% (0.1) per year over the past several years.

The current cost is $40 per pound .

The exponential decay equation is given by :-

`y=A(1-r)^x`, where r is the rate of decay and A is the initial amount and x is the time period.

Put A = 40 , r= 0.1 and t=2, we get

`y=40(1-0.1)^2=\$32.4`

Hence, the cost of a pound of gourmet beans two years ago= $32.4