Question

A block of land was available for sale last year at $35,000.

a) if the inflation rate during the year was 3.2%, what would be the value of the land in this year?

b)if the inflation rate this year is reduced 2.7%, what price would the land attract next year??​

Answer 1

- $36,120

- $35,945

Explanation:

This problem is rather pretty simple when breaking it down. We really just need to ask ourselves what the percent is of our whole and then add that to our total. Work shown below.

Step 1:

Move decimal over on both. You should get...

.032 and .027

(You always move it two to the left in these types of cases.)

Step 2:

Multiply our original price by inflation decimal. You should get...

$35,000 x .032 = $1,120

$35,000 x .027 = $945

Step 3:

Add our previous answer to our original price. You should get...

$35,000 + $1,120 = $36,120

$35,000 + $945 = $35,945

- This is our final answer, as the pricing increased due to inflation.

Note: Inflation means their is an increase in price.

Let me know if a further explanation is needed.