This has the same effect as "a compound interest rate, compounded annually". Unless stated otherwise, the interest rate is understood be be compounded annually, that is, once a year.
So you would have:
P(1.04)^15 = 10500 , where P is the original amount
P = 10500 / (1.04)^15 or 10500(1.04)^-15
= 10500(.5552645..) = $5830.28
Food prices have been rising at a rate of 4% per year for several years. If the annual cost of food for a typical family of four is $10,500 today, what would it have been 15 years ago?
Do I use the A=P(A+rt) formula? It doesn't seem like the compound interest formula because then it would say compounded daily/monthly/etc. I don't think it is I=Prt either because then it would say the amount of interest.
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