Question

the rate of inflation is 3%. the cost of an item in the future years can be found by irerating the function c(x) = 1.03x find the cost of a $1500 refrigerator in three years if the rate of inflation remains constant

Answer 1

So with this, remember the exponential equation is y = ab^x, with a = initial value and b = growth/decay. In this case, 1.03 is the growth, 1500 is the initial value, and 3 is the x variable since time is the independent variable in this situation. Our equation will look like this:
`c(3)=1500(1.03)^3`

Firstly, solve 1.03^3:
`c(3)=1500(1.092727)`

Next, multiply, and your answer will be (rounded to the hundreths): c(3) = $1639.09