If cakes cost 50 cents, and the prices go up 6 percent a year, how much did it cost after two years? Three?
Well, I'm not supposed to solve it, but I have to make up a generalized equation. Can someone give me the equation? I'm really confused. Thank you!
A cake costs (fifty cents) or $0.50.
If it increases by 6% (0.06 each year, then cost = 0.50 + 0.06(0.50)*(#years).
This assumes the interest increases by 6% of the 50 cents each year; i.e., the interest is not compounded.
Just plug in the #years. For example, 3 years would be
0.50 + 0.06*0.50*3 = 0.50 + 0.09 =
$ 0.59
If that isn't the case the equation is slightly different.
Thank you so much, that really helped!
Of course! I can help you with that. In order to find the cost of the cake after a specific number of years, we need to use the equation for compound interest.
The formula for calculating compound interest is:
A = P * (1 + r)^n
Where:
A = the final amount or cost of the cakes
P = the initial price of the cake
r = the annual interest rate (as a decimal)
n = the number of years
Based on the given information, we know that the initial price of the cake is 50 cents (0.50 dollars) and the annual interest rate is 6 percent, which we need to convert to a decimal (0.06). Now we can plug these values into the compound interest formula:
After 2 years:
A = 0.50 * (1 + 0.06)^2
After 3 years:
A = 0.50 * (1 + 0.06)^3
To find the final cost, simply calculate the value of "A" using these formulas.
Remember to substitute the appropriate values in the equation, perform the necessary calculations, and round the answer to the correct number of decimal places.