Question

In problems 16-20, calculate the expected price in the year 2008 if you assume that there was a consistent 5% inflation rate and use the given 1988 price. answers should be rounded to the nearest penny. 16. median salary, $27,225 17. gallon of gas, $1.08 18. dozen eggs, $0.89 19. movie admission, $3.50 20. mcdonalds hamburger, $0.62

Answer 1

16. 72236.03
17. 2.87
18. 2.36
19. 9.29
20. 1.65
The exponential growth formula is as follows

`y=a(1+r)^(x)`:
a is initial value
($27,225 17. gallon of gas, $1.08 18. dozen eggs, $0.89 19. movie admission, $3.50 20. mcdonalds hamburger, $0.62)
r is rate of increase (0.05)
x is time (2008-1988 = 20 years)
to solve plug in values for each one.

`y=27225(1+0.05)^(20) = 72236.03`


`1.08(1+0.05)^(20) = 2.87`


`.89(1+0.05)^(20) = 2.36`


`3.50(1+0.05)^(20) = 9.29`


`.62(1+0.05)^(20) = 1.65`