Respuesta :
Based on the average inflation rate of 3.22%, the new price of a dozen eggs after 25 years follows the equation: F = P(1+r)^t, where F = future value, P = present value, r = rate of inflation, and t = time in years
F = ($3.50)(1.0322)^25 = $7.73
F = ($3.50)(1.0322)^25 = $7.73
Assuming that the inflation is constant, in 25 years the cost will be $25.76
How to find the cost in 25 years?
First, we need to assume that the inflation will be constant in the next 25 years, currently, it is of 8.3% in the US.
Then we have an exponential that increases by 8.3% each year, this gives:
[tex]f(t) = A*(1 + 8.3/100)^t\\\\f(t) = A*(1 + 0.083)^t[/tex]
Where A is the initial value, in this case, A = 3.50.
And we want to find the price in 25 years, so we just need to replace t by 25.
[tex]f(25) = 3.50*(1 + 0.083)^{25} = $25.76[/tex]
If you want to learn more about exponentials
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