When the rate of inflation is 4 1/2% per year and the average price of a car is

Question

When the rate of inflation is 4 1/2% per year and the average price of a car is currently $23,000, the average price aftern years is given by the formula below.

Pn = $23,000(1.045)n

Compute the average prices for the next 5 years. (Round your answers to two decimal places.)
P1 = $  
P2 = $  
P3 = $  
P4 = $  
P5 = $

12. +-/7.69 points LarCalc10 9.1.074 My Notes Ask Your Teacher when the rate of inflation is 4 % per year and the average price of a car is currently $23,000, the average price after n years is given by the formula below. Pn = $23,000(1045)n Compute the average prices for the next 5 years. (Round your answers to two decimal places.) P3 = $ Need Help? Read It Talk to a Tutor

Explanation / Answer

Ans)

current car cost is 23000 $

inflation rate is (9/2)% = 4.5/100 = 0.045

therefore, Price ater 1 year will be 23000(1+.045)1 = 23000(1.045) = 24035 $

Pn = 23000(1.045)n

P1 = 23000(1.045)1 = 25035 $

P2 = 23000(1.045)2 = 23000(1.092025) = 25116.58 $

P3 = 23000(1.045)3 = 23000(1.141166125) = 26246.82 $

P4 = 23000(1.045)4 = 23000(1.19251860062) = 27427.93 $

P5 = 23000(1.045)5 = 23000(1.24618193765) = 28662.18 $

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