The interest rate over the last three years has been:
2008: 2.8%
2009: 2.6%
2010: 3.2%
Find the cost now of an item bought for K440 at the beginning of 2008, assuming that the price has increased with inflation.
To find the cost of the item now, we need to first calculate the total increase in price due to inflation over the three years based on the given interest rates.
First, calculate the total increase in price for 2008 to 2009:
440 * 2.8% = 12.32 (increase in price for 2008)
440 + 12.32 = K452.32 (price at the beginning of 2009)
Next, calculate the total increase in price for 2009 to 2010:
452.32 * 2.6% = 11.78 (increase in price for 2009)
452.32 + 11.78 = K464.10 (price at the beginning of 2010)
Finally, calculate the total increase in price for 2010 to now:
464.10 * 3.2% = 14.85 (increase in price for 2010)
464.10 + 14.85 = K478.95 (estimated price now based on inflation)
Therefore, the cost of the item bought for K440 at the beginning of 2008, assuming it has increased with inflation, would be approximately K478.95 now.