Ask a New Question

When inflation causes the price of an item to increase the new cost C and the original cost c are related by the formula C=c(1+r)^n, where r is the rate of inflation per year as a decimal and n is the number of years. What would be the price of a $4.99 item after six months of 5% inflation?

1 answer

C = 4.99(1+.05)^1/2

Ask a New Question or answer this question.

Similar Questions

Due to inflation there were two demand increases. After the second increase the price for a certain item became twice as big as
1. 9 answers
If an industry wide increase in cost happens and the average cost curve for each firm shifts up by $1 will the cost per unit
1. 0 answers
Which one of the following can be regarded as a neutral definition of inflation?Inflation is too much money chasing too few
1. 1 answer
Which of the following statements about inflation is not true?a. An increase in inflation increases nominal interest rates. b.
1. 1 answer

more similar questions