Question

You are planning on purchasing a new car and have your eye on a specific model. You know that new car prices are projected to increase at a rate of 5% per year for the next few years.

Find the cost of the car 2 years from now if the current price is $25,000. Write the equation that represents the projected cost C and provide a solution for the problem.
a.
C = 25,000 (1.05) squared
$27,562.50
c.
C = StartFraction 25,000 (2) Over 1.05 EndFraction
$47,619.05
b.
C = 25,000 (1.05) (2)
$52,500
d.
C = 25,000 (2) Superscript 1.05
$51,763.25



Please select the best answer from the choices provided


A
B
C
D

Answer 1

The projected cost of a car two years from now, given a current price of $25,000 and an annual price increase rate of 5%, is calculated using the formula C = 25,000 (1.05)^2, which yields $27,562.50.

Step-by-step explanation:

The problem requires finding the future cost of a car given that the price increases at a rate of 5% per year. The current price of the car is $25,000. We need to use the formula for compound interest to find the price of the car after 2 years.

The correct equation to represent the projected cost C is:

C = 25,000 (1.05)^2

To solve this, we can calculate:

C = 25,000 × 1.05 × 1.05
= 25,000 × 1.1025
= $27,562.50

This is the projected cost of the car two years from now.

Answer 2

A

Step-by-step explanation:

Cost of the car in "n" years=25000*(1+0.05)^n

Cost of the car in 2 years=25000*(1+0.05)^2=25000*(1.05)^2=27562.5