Find the cost of each item in 5 years, assuming an inflation rate of 8%. (Round each answer to the nearest cent.)
42.42
To find the cost of each item in 5 years, we will use the formula for compound interest:
Final Cost = Initial Cost * (1 + Inflation Rate)^Number of years.
Let's assume the initial cost of each item is $100.
1. For the first item:
Final Cost = $100 * (1 + 0.08)^5
= $100 * (1.08)^5
Calculating this, we get:
Final Cost = $100 * 1.46933
= $146.93
Therefore, the cost of the first item in 5 years would be approximately $146.93.
2. For the second item:
Following the same process,
Final Cost = $100 * (1.08)^5
Calculating this, we get:
Final Cost = $100 * 1.46933
= $146.93
Therefore, the cost of the second item in 5 years would also be approximately $146.93.
By using the same formula for the remaining items, we can find the cost of each item in 5 years taking into account the 8% inflation rate.
To find the cost of each item in 5 years with an inflation rate of 8%, we need to apply the inflation rate to the current prices of the items. Here's the step-by-step process:
1. Determine the current price of each item.
2. Calculate the inflation rate by multiplying the current price by the inflation rate (as a decimal).
3. Add the inflation rate to the current price to get the future price of each item.
Let's assume we have three items:
- Item A: $10.00
- Item B: $25.00
- Item C: $50.00
1. Calculate the inflation rate:
Inflation Rate = 8% = 0.08 (as a decimal)
2. Calculate the future price of each item:
- Item A:
Inflation Amount = $10.00 * 0.08 = $0.80
Future Price = $10.00 + $0.80 = $10.80
- Item B:
Inflation Amount = $25.00 * 0.08 = $2.00
Future Price = $25.00 + $2.00 = $27.00
- Item C:
Inflation Amount = $50.00 * 0.08 = $4.00
Future Price = $50.00 + $4.00 = $54.00
Therefore, in 5 years, the cost of each item with an 8% inflation rate would be:
- Item A: $10.80
- Item B: $27.00
- Item C: $54.00
Remember to round each answer to the nearest cent, which would be $10.80, $27.00, and $54.00 based on our calculations.