If you paid $7.00 to go to a movie in 2006, what will the price of this movie be in the year 2011 if inflation averages 6 percent?
A) $5.12
B) $5.23
C) $9.37
D) $9.73

Question

Quizplus · Accepted Answer

To find the price of the movie in 2011 after inflation, we use the formula for compound interest: $A = P(1 + r)^n$, where $A$ is the amount after $n$ years, $P$ is the principal amount ($7.00), $r$ is the annual rate of inflation (6% or 0.06), and $n$ is the number of years (2011 - 2006 = 5 years). Plugging in the values, we get $A = 7(1 + 0.06)^5$, which calculates to approximately $9.37.

If You Paid $7