Find the cost of a Sunday paper in 8 years, assuming that it costs $1.25 today and the annual inflation rate will be 3%.
A) $1.58
B) $1.28
C) $1.29
D) $1.55
E) $1.25

Question

Quizplus · Accepted Answer

The cost of the Sunday paper in 8 years can be calculated using the formula for compound interest: Future Value = Present Value * (1 + rate)^time. Here, Present Value = $1.25, rate = 3% or 0.03, and time = 8 years. Plugging these values in gives: Future Value = $1.25 * (1 + 0.03)^8 ≈ $1.58.

Find the Cost of a Sunday Paper in 8 Years