00:01
Hi there, so for this problem, we need to assume that the annual rate of inflation will average 3 .8 % over the next 10 years.
00:12
3 .8 % is the annual rate of inflation.
00:22
Rate of inflation.
00:26
So with that information for part a of this problem, we need to write an equation to mark a, the approximate cost c of goods and services during any year in the next decade.
00:40
This is quite easy to obtain.
00:42
That equation of the cost is simply the initial value of the cost that we are going to call p -0, and this times 1 plus the rate given in numbers.
00:56
So we need to divide that value by 100.
00:59
So we obtained that that is 0 .038.
01:03
And this elevated to the time t.
01:06
So we obtained that this is the initial population times 1 .1 .038 elevated to the times t.
01:17
So that's the solution for part a.
01:20
Now for part b, we are told that if the price of a break job for a car is presently a value of 400, we need to estimate the price 10 years from now.
01:34
Now...