Elizabeth wants to buy a new laptop computer, but she just started her baby sitting job and she hasn't earned any money yet. She figures once she starts earning income she save $90 a month in a saving account that earns three percent interest anually. She learned that the annual inflation rate is currently about three percent. She decides to save her money and buy the laptop next year when she can afford to pay cash for it.
Assuming the price of the laptop computer increases at the rate of inflation, how much will the laptop computer cost a year from now ?
How much will elizabeth put into her account in the year?
Will elizabeth be able to buy the laptop computer?
Will elizabeth have any money left over?
assuming the interest is posted at the end of the year, she will have 90*12 * 1.03
No idea about leftover money. How much does the computer cost?
To calculate the cost of the laptop computer a year from now, we first need to determine the inflation-adjusted price. Since the annual inflation rate is three percent, we can assume that the price of the laptop will also increase by three percent.
Let's assume the current price of the laptop is P dollars. The inflation-adjusted price after one year can be calculated by multiplying the current price by (1 + inflation rate).
Inflation-adjusted price after one year = P * (1 + 0.03) = P * 1.03
So, the laptop computer will cost 1.03 times its current price after one year.
Next, let's calculate how much Elizabeth will put into her savings account in a year. She plans to save $90 each month, so the total savings for the year can be calculated by multiplying $90 by 12.
Total savings for the year = $90 * 12
Now, let's determine if Elizabeth will be able to buy the laptop computer. If her total savings for the year are greater than or equal to the cost of the laptop computer a year from now, she will be able to buy it.
Finally, to determine if Elizabeth will have any money left over, we need to subtract the cost of the laptop computer from her total savings. If this result is greater than zero, she will have money left over.
I will calculate the answers using the given information.
To determine the cost of the laptop computer a year from now, we need to take into account the inflation rate. Since the laptop cost will increase at the rate of inflation, which is currently three percent, we can calculate it as follows:
Cost of laptop computer a year from now = Current cost of laptop computer * (1 + inflation rate)
= Current cost of laptop computer * (1 + 0.03)
As for how much Elizabeth will put into her account in a year, we know that she plans to save $90 per month, which totals to $90 * 12 = $1080 per year.
To evaluate if Elizabeth will be able to buy the laptop computer, we need to compare the cost of the laptop a year from now with the amount she will have saved. If her savings are sufficient to cover the cost of the laptop, she will be able to buy it.
Finally, to calculate if Elizabeth will have any money left over, we subtract the cost of the laptop from her total savings:
Money left over = Total savings - Cost of laptop computer
With this information, we can now do the calculations to find the answers to each question.