​With an Annual Rate of Inflation of 4% Over the Next

question 402

Multiple Choice

​With an annual rate of inflation of 4% over the next 10 years,the approximate cost of goods or services during any year in the decade is given by where t is the time (in years) and P is the present cost.The price of an oil change for a car is presently $24.95.Estimate the price 10 years from now.Round your answer to the nearest cent.

• A) ​​$37.09
• B) ​$36.93
• C) ​​$89.00
• D) ​​$63.90

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Definitions:

Double Diminishing-Balance

An accelerated method of depreciation that calculates expense by doubling the straight-line depreciation rate applied to the declining book value of an asset.

Depreciation Expense

The allocated reduction in the value of a tangible asset over its useful life, recognized as an expense on the income statement.

Residual Value

The projected value that an asset is anticipated to yield when it is disposed of after its lifespan has concluded.

Depreciation Method

A systematic approach used to allocate the cost of an asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.