Question

Assuming that the annual rate of inflation averages 3% over the next 10 years, estimate the price of an oil change for your car 10 years from now.

A) $31.63
B) $32.57
C) $33.52
D) $34.48

Answer 1

To estimate the price of an oil change for your car 10 years from now, multiply the current price by the inflation factor. Using an average rate of inflation of 3%, the estimated price is approximately $34.48.

Step-by-step explanation:

To estimate the price of an oil change for your car 10 years from now, we can use the average annual rate of inflation of 3% over the next 10 years. We can calculate this by multiplying the current price of an oil change by the inflation factor.

Let's say the current price of an oil change is $30. To find the estimated price 10 years from now, we calculate:

New price = Current price * (1 + average inflation rate) ^ number of years

New price = $30 * (1 + 0.03) ^ 10

New price = $30 * 1.03 ^ 10

Solving this equation, we find that the estimated price of an oil change 10 years from now is approximately $34.48 (option D).