The current price on a 60-inch flat panel LCD HD television is $1,200.Big screen HD television prices have dropped at an average rate of 12% per year in recent years.If you expect this trend to continue,how much will this style of television cost in two years?
A)$1,122
B)$1,087
C)$1,008
D)$929

Question

Quizplus · Accepted Answer

To calculate the price of the 60-inch flat panel LCD HD television after 2 years, we need to use the compound interest formula:

Final Price = Initial Price * (1 - r)n

where r is the annual rate of decrease (12% or 0.12), n is the number of years (2), and Initial Price is the current price ($1,200).

Plugging in the values, we get:

Final Price = $1,200 * (1 - 0.12)2
Final Price = $1,200 * 0.7744
Final Price = $929.28

Rounding this to the nearest dollar gives us a final price of $929, which is option D.

The Current Price on a 60-Inch Flat Panel LCD HD