Question

what will the inflation-adjusted cost of a $154,600 house be in 5 years? round to two decimal places.

Answer 1

Answer:

The inflation-adjusted cost of the house is $166,548.11

Explanation:$\begin{gathered} The\text{ funcion the inflation adjusted cost:} \\ C(t)\text{ = C}_0(1\text{ + r\rparen}^t \\ r\text{ = rate} \\ \text{t = time} \\ C_0\text{ = cost of product} \end{gathered}$$\begin{gathered} From\text{ the information in the question:} \\ C_0\text{ = cost of house =\ 154600} \\ r\text{ = 1.5\% = 0.015} \\ t\text{ = 5 years} \\ C(t)\text{ = ?} \\ We\text{ need to find the inflation adjusted cost using the function we were given in the question} \end{gathered}$

substitute the values into the formula:

$\begin{gathered} C(t)\text{ = 154600\lparen1 + 0.015\rparen}^5 \\ C(t)\text{ = 154600\lparen1.015\rparen}^5 \\ C(t)\text{ = 166548.107} \\ \\ To\text{ 2 decimal place, C\lparen t\rparen = 166548.11} \end{gathered}$

The inflation-adjusted cost of the house is $166,548.11