Asked by Jimmy

If cakes cost 50 cents, and the prices go up 6 percent a year, how much did it cost after two years? Three?

Well, I'm not supposed to solve it, but I have to make up a generalized equation. Can someone give me the equation? I'm really confused. Thank you!

Answers

Answered by DrBob222
A cake costs (fifty cents) or $0.50.
If it increases by 6% (0.06 each year, then cost = 0.50 + 0.06(0.50)*(#years).

This assumes the interest increases by 6% of the 50 cents each year; i.e., the interest is not compounded.

Just plug in the #years. For example, 3 years would be
0.50 + 0.06*0.50*3 = 0.50 + 0.09 =
$ 0.59

If that isn't the case the equation is slightly different.
Answered by Jimmy
Thank you so much, that really helped!
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