Question

The formula S=C(1+r)^t models inflation where C= the value today, r= the annual inflation rate (in decimal form) and s= the inflated value t years from now. If the inflation rate is 7%, use the formula to find out how much a house now worth 84,000 will be worth in 8 years. How much will the house be worth in 8 years? Round to the nearest dollar

Answer 1

Given:

The formula for inflation is given as S = C(1+r)^t , where C= the value today, r= the annual inflation rate (in decimal form) and s= the inflated value t years from now.

Find:

we have to find out how much a house now worth 84,000 will be worth in 8 years, if the inflation rate is 7%.

Step-by-step explanation:

given C = $84000

r = 7% = 7/100 = 0.07

t = 8 years

Substitute values of C, r and t in the given formula, we get

`\begin{gathered} S=84000(1+0.07)^8 \\ S=84000(1.07)^8 \\ S=144327.64\approx144328 \end{gathered}`

Therefore, the house worth in 8 year is $144328