Question

The annual inflation rate is 3.1% per year. If a movie ticket costs $10.50 today, find a formula for f the price of a movie ticket t years from today, assuming that movie tickets keep up with inflation.

Answer 1

final amount = (start amount) [1 + (growth per period)]^(number of periods)

f = $10.50 (1 + .031)^t

this technique also works for compound interest

Answer 2

3.1% = .031
1 + .031 = ?
f = $10.5 * (?^t)