College Algebra Word Problem

Question

 write an equation, and then use the equation in the solving process.

An economist predicts that the buying power B(x) of a dollar x years from now will be given by the formula B(x) = 0.99x. How much will today's dollar be worth in 5 years? Round the answer to the nearest cent.

Answer 1

B(5) = 0.99(5)

= 0.495

round off by rounding up for 5 to 9 so

B(5) = 50 cents but this doesn't make sense

B(0) shoud equal $1 not $0

the buying power generally decreases due to inflation

B(x)=0.99x suggests a 1% inflation rate, or 1% decrease in buying power

It should be that B(1) = 99 cents, that would better be formulated as B(x) = 1-0.99x

B(5) = 1-0.99(5) = 1 - 0.495 = 0.505 which when rounded up = 51 cents

actual value is 50 1/2 cents for B(x)=1-0.99x

and 49 1/2 cents for B(x) = 0.99x