Assuming that the rate of inflation is 4% per year, the equation P = P _o (1.04) ^t yields the predicted price P , in t years, of an item that presently costs P _o. Find the predicted price of a $0.95 soft drink in 9 years. The choices are rounded to the nearest cent. A) $0.68 B) $1.35 C) $1.78 D) $2.20

Question

Quizplus · Accepted Answer

Using the formula given, we can plug in the values to find the predicted price of the soft drink in 9 years:

P = $0.95 * (1.04)^9
P = $1.35 (rounded to the nearest cent)

Therefore, the predicted price of the soft drink in 9 years is $1.35. The best choice is B.

Assuming That the Rate of Inflation Is 4% Per Year