3.3 Graphs of Functions

Question

If the CPI for fuel oil stood at 91 at the beginning of 1999, approximately what was it at the beginning of 2000?

Answer 1

CPI = Consumer Price Index

I believe we are missing the growth factor or percentage of growth.

Lets use the APERT equation.

A(t) = P*e^rt

A(t) = 91 * e^rt

t = 0 is at 1999

t = 1 is at 2000

A(0) = 91 * e^r(0) = 91 * 1 = 91

A(1) = 91 * e^r(1) = 91 * e^r

If the growth rate is x%, then use r = x/100

For example, if the growth rate is 5%, then use r = 0.05

A(1) = 91 * e^r(1) = 91 * e^(0.05)*(1) = 91 * e^0.05 = 91 * 1.05 = 95.67