Question

The average price of a gallon of milk is $3.31. If the price increases .88% each year , how much will a gallon of milk cost in 20 years?

Answer 1

$3.94

Explanation:

You will need to use the compound interest formula for this.

`P(1+(r)/(n) )^(nt)`

P = initial balance

r = interest rate

n = number of times compounded annually

t = time

Your equation will look like this:

`3.31(1+(.0088)/(1) )^(20)` = 3.94