Solve the problem.
-The 2006 price of a certain type of car is $24,700. Estimate the price of the same car in the year 2020. Assume a constant annual inflation rate of 2.2%. Give a number of significant figures consistent
With the 2006 price given.

Question

Quizplus · Accepted Answer

The price of the car in 2020 can be estimated using the formula for compound interest: $P = P_0(1 + r)^t$, where $P$ is the future value, $P_0$ is the initial value ($24,700), $r$ is the annual rate (2.2% or 0.022), and $t$ is the time in years (2020 - 2006 = 14 years). Plugging in the values: $P = 24700(1 + 0.022)^{14}$, which calculates to approximately $33,497.28, matching choice B.

Solve the Problem. -The 2006 Price of a Certain Type of Car Is