Question

In 1960, the price of a gallon of gasoline was $0.31. If the price of gas grew with inflation, what would a gallon of gas cost in 2000?

Options:
a. $1.86
b. $1.85
c. $1.87
d. $1.88

Answer 1

To find the cost of a gallon of gas in 2000, we need to calculate the inflation rate from 1960 to 2000 and apply it to the initial price. The final price would still be $0.31 in 2000.

Step-by-step explanation:

To find the cost of a gallon of gas in 2000, we need to calculate the inflation rate from 1960 to 2000 and apply it to the initial price. Inflation rate is the percentage change in the price level over time. We can use the formula:

Inflation rate = (Final price - Initial price) / Initial price * 100%

Let's plug in the given values: Initial price = $0.31, Final price = Unknown, Inflation rate = Unknown.

To find the inflation rate, we can rearrange the formula:

Final price = Initial price * (1 + Inflation rate / 100%)

We can use this formula to calculate the Final price:

1. Calculate the inflation rate: (Inflation rate) = (($0.31) - ($0.31))/($0.31) * 100% = 0%
2. Plug the inflation rate and initial price into the formula: Final price = $0.31 * (1 + 0%/100%) = $0.31

Therefore, a gallon of gas would still cost $0.31 in 2000.