Question

Between 2005 and 2010, the average rate of inflation was about 2.7% per year. If a cart of groceries cost $190 in 2005. What did it cost in 2010?

Answer 1

$217.07

Explanation:

Each year, the cost of the groceries was multiplied by 100% +2.7% = 1.027. Doing this multiplication for 5 years result in a multiplying facor of ...

... 1.027^5

so the cost of the groceries after 5 years is ...

... $190.00 × 1.027^5 ≈ $217.07