Devise the exponential growth function that fits the given data, then answer the

Question

Devise the exponential growth function that fits the given data, then answer the accompanying question. Be sure to identify the reference point (t-0) and units of time. Between 2005 and 2010, the average rate of inflation in a certain country was about 5% per year. If a cart of groceries cost $120 in 2005, what will it cost in 2015 assuming the rate of inflation remains constant? What is the reference point (1-0)? 0 A, O B. °C, 0 D. the inflation rate, 5% the cost of groceries, $120 the year 2010 the year 2005 E. the year 2015

Explanation / Answer

The ref point t = 0 as in time = 0
means the yr 2005 here

Option D

But what will it cost?
Well, we can use the formula
A = P(1 + r)^t

A = 120(1 + 5%)^t

A = 120(1.05)^t

A = 120(1.05)^10 for the yr 2015

195.47 dollars approx

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