A utility company in a western city of the United States expects the consumption

Question

A utility company in a western city of the United States expects the consumption of electricity to increase by 8%/year during the next decade, due mainly to the expected increase in population. If consumption does increase at this rate, find the amount by which the utility company will have to increase its generating capacity in order to meet the needs of the area at the end of the decade. (Round your answer to two decimal places.)
1 %

Today a typical family of four spends $920/month for food. If inflation occurs at the rate of 3%/year over the next 4 years, how much should the typical family of four expect to spend for food 4 years from now? (Round your answer to the nearest cent.)
$ 1 per month

Explanation / Answer

let present consumption = p

rate of increase/year = 8%

number of years = 10

consumption after 10 years = c

c = p(1+0.08)^10 = 2.15p

FV=P(1+r)^t
FV=900(1+0.03)^4
FV=900(1.03)^4
=1012.957

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