Question

When Elizabeth began college, the price of her school books were $345. One year later, the cost for her books increased by 7%. If the price for books continued to increase by 7% each year, what is the price of books after 5 years? Round your answer to the nearest dollar.

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Answer 1

$484

Explanation:

You want the value of books after 5 years if their initial value was $345 and their cost increased at the rate of 7% per year.

Exponential model

The model of the price of the books can be the exponential function ...

p(t) = p0 · (1 +r)^t

where p0 is the initial price, r is the annual rate of increase for t years.

p(5) = 345·1.07^5 ≈ $484

The price of books after 5 years is about $484.

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