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Many economists view a 3% annual inflation rate as "acceptable". Assuming a 3% annual increase in the price of automobiles, how much will a new Suburban cost you 5 years from now, if today's price is $38,000?

Respuesta :

Answer:

suburban cost = 44052.41

Explanation:

given data

annual inflation rate = 3%

time = 5 year

today's price = $38,000

to find out

suburban cost

solution

we get here suburban cost that is

suburban cost = today's price × [tex](1+r)^{t}[/tex]   .................1

put here value and we get

suburban cost = $38,000 × [tex](1+0.03)^{5}[/tex]    

suburban cost = 44052.41