# math

posted by .

Confused!

So here is the question:
Inflation is currently causing the cost of items to increase by about 2.5% per year. In 2009 a litre of gasoline costs approximately \$0.90. What will it cost to fill a 60 litre gas tank 10 years from now. Round your answer to the nearest dollar. Name at least one thing other than inflation that determines the cost to the consumer of any article (not just gasoline).

For the mathematical portion, what would be the correct answer?

A = (0.9(1+0.25)^(10)) (60)

60 = # of litres
earlier portion of equation = cost of gas (per litre)

OR

math - Wayne, Tuesday, April 2, 2013 at 4:35pm

Today it costs \$54 to fill tank. In one year (per cent increase problem):
(x - 54)/54 = .025, so x = \$55.35
in the next year:
(x - \$55.35)/\$55.35 = .025, so x = \$56.73
Do this 8 more times, and you will get your answer: \$69.12
I used an Excel worksheet to generate the answer. Not sure if there's a formula to solve this or not.
math - Wayne, Tuesday, April 2, 2013 at 4:40pm

There is a formula, called the standard future value formula:
54 * (1 + .025)^10 = future value = \$69.12

Thanks,

• math -

the price increases exponentially
that is,
if it increases 2.5% this year, then next year it will increase 2.5% on the NEW amount

so if 2009 ----> 90 cents
10 years later ,
cost = 90(1.025)^10 = 115.20 cents or \$1.152

so to fill a 60 L tank would cost
60(1.152) = \$69.12 or \$69 to the nearest dollar.

BTW, yesterday I paid \$1.223 / L in Ontario, the lowest in many weeks.

• math -

They are both the same.
The problem with the first is that 2.5% = 0.025, not 0.25, which is 25%.

After all, (0.9)(60)=54

and that is the only difference between the two answers, aside from the typo.

• math -

Wow thanks guys, perfect feedback.

Much appreciated

## Similar Questions

In January, gasoline cost \$1.05 per gallon. In July, gasoline cost \$1.20 per gallon. Find the percent of increase. Would the answer for this question be 14.3?

Can someone else explain it but more easier for an 8th grader ______________________________________ In January, gasoline cost \$1.05 per gallon. In July, gasoline cost \$1.20 per gallon. Find the percent of increase. Would the answer …
3. ### algebra 2

When inflation causes the price of an item to increase the new cost C and the original cost c are related by the formula C=c(1+r)^n, where r is the rate of inflation per year as a decimal and n is the number of years. What would be …
4. ### Word Problems

I have two questions: Inflation is currently causing the cost of items to increase by about 2.5% per year. In 2009 a litre of gasoline costs approximately \$0.90. What will it cost to fill a 60 litre gas tank 10 years from now?
5. ### marketing

QUESTION #1 cost analysis with graph office copier has an initial price of \$2500. A service contract costs \$200 for the first year and increases \$50 per year thereafter. It can be shown that the total cost of the copier after n years …
6. ### math

Inflation is currently causing the cost of items to increase by about 2.5% per year. In 2009 a litre of gasoline costs approximately \$0.90. What will it cost to fill a 60 litre gas tank 10 years from now. Round your answer to the nearest …
7. ### math

If gasoline costs \$0.42 a liter, approximately how much will it cost to fill a 40 gallon tank?
8. ### Macroeconomics

cost in 2005 is 15.00 cost on 2009 is 20.50 Consumer price index (20.50/15.00)x100=137 I understand that part but my professor said to measure inflation he gave the answer 37% divide 37/4=9.25% 4 number of years 9.25% annual rate inflation …
9. ### math

A college student wishes to compare tuition fee increases during the period 1999 to 2009 to the general increase in the cost of living. Tuition increased from \$350 per course in the 1999/2000 academic year to \$495 per course in the …
10. ### MATH

The cost to manufacture a product is proportional to the quantity produced, with a cost of \$270000 dollars per day when 900 items are produced. The cost to store n items is proportional to the square of n, with a daily storage cost …

More Similar Questions