Question

Consumer Math Help?

Question:
Let y = 10,000 (0.97)^x represent the buying power of $10,000, with an inflation rate of three percent per year. The table below represents the first four years later. Which year is incorrect?
1 year later (x) | Purchasing Power (y) = 9,700
2 years later (x) | Purchasing Power (y) = 9,308
3 years later (x) | Purchasing Power (y) = 9,127
4 years later (x) | Purchasing Power (y) = 8,853

Answers:
A: 1
B: 2
C: 3
D: 4

Answer 1

Here we are given the equation:

`y=10000*(0.97)^(x)`

Here x represents the year.

Now plugging the value of x for different year :

A. x=1,

`y=10000*(0.97)^(1)`

y=9700

option A. 1 year is correct.

B. x=2,

`y=10000*(0.97)^(2)`

y=9404

But in the option we are given y=9308

So option B is incorrect.

C. x=3,

`y=10000*(0.97)^(3)`

y=9126.73

y= 9127 ( approx.)

So option C is correct.

D. x=4

`y=10000*(0.97)^(4)`

y=8852.9

y=8853 (approx)

So option D is also correct

Answer : option C. 3