Final answer:
The products that cost $500 three years ago would now cost approximately $546.36.
Step-by-step explanation:
The inflation rate of 3 percent per year means that prices are increasing by 3 percent each year.
To find the cost of a product after three years, we can calculate the compound interest using the formula:
Final cost = Initial cost * (1 + inflation rate)number of years
Plugging in the values, we get:
Final cost = $500 * (1 + 0.03)3
Final cost = $500 * 1.092727 = $546.36
Therefore, the products that cost $500 three years ago would now cost approximately $546.36.