If Brazil has an annual inflation rate of 11% and an item will cost 125,000 reals in 3 years, what does the same item cost now Round to the nearest real. ?
A)91,389 reals
B) 91,399 reals
C) 91,394 reals
D) 172,355 reals
E) 173,610 reals

Question

If Brazil has an annual inflation rate of 11% and an item will cost 125,000 reals in 3 years, what does the same item cost now  Round to the nearest real. ?
A)91,389 reals
B) 91,399 reals
C) 91,394 reals
D) 172,355 reals
E) 173,610 reals

Quizplus · Accepted Answer

To find the present cost, we will use the formula:
Present Cost = Future Cost / (1 + inflation rate)^number of years
Substituting the given values, we get:
Present Cost = 125,000 / (1 + 0.11)^3
Present Cost = 91,398.87
Rounding off to the nearest real, we get the answer as 91,399 reals. Therefore, the correct answer is B.

If Brazil Has an Annual Inflation Rate of 11% and an Item