If the price of an item increases from p1 to p2 over a period of n years, the annual rate of inflation can be modeled by i = (p2/p1)^1/n

Question

If the price of an item increases from p1 to p2 over a period of n years, the annual rate of inflation can be modeled by i = (p2/p1)^1/n
-1

In 1945, the average value of a home was $3000. In 2012 the average value was $200,000. What was the rate of inflation for a home?

Dog · Accepted Answer

Bark

Steve · Answer

so, since you have the formula and the numbers, what's the problem? What did you get?

anonymous · Answer

The rate of inflation is 0.064688? (200000/3000)^(1/67) -1 = 0.064688

Steve · Answer

looks good to me. Though I'd probably have said that the rate of inflation was 6.47%