Question

Suppose that prices increase 2.5% each year for 10 years. How much will a jacket that costs 100 today cost in 10 years?

Answer 1

$125

Explanation:

Find out what the percentage increase is in ten years.

2.5%->change to decimal thingy (divide by 100) 0.025 then multiply it by the total amount of years(10): 0.025(10)= 0.25- 25%

The cost percentage in 10 years is 25%

Next multiply your new percentage by the jacket's original cost: 0.25(100)=25

So $25 is the amount that the jacket has increased over ten years

Add 25 to 100 to fin the cost of the jacket in 10 years.

Kinda a confusing explanation but the answer is right.