Assuming That the Rate of Inflation Is 4% Per Year

question 15

Multiple Choice

Assuming that the rate of inflation is 4% per year, the equation P = P _o (1.04) ^t yields the predicted price P , in t years, of an item that presently costs P _o. Find the predicted price of a $0.95 soft drink in 9 years. The choices are rounded to the nearest cent.

• A) $0.68
• B) $1.35
• C) $1.78
• D) $2.20

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Definitions:

Best Friend

A person whom one shares the closest possible kind of friendship, characterized by a deep bond, mutual respect, and affection.

William Damon

An American psychologist known for his work in human development, particularly in the areas of moral character and purpose among children and adolescents.

Play

Engaging in activities for enjoyment and recreation rather than a serious or practical purpose, often seen as essential for developmental processes in children.

Best Friend

A person's closest and most intimate friend, with whom they share a deep and enduring bond.