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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!

  • Math -

    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.

  • Math -

    Thank you so much, that really helped!

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