Find the cost of a $1500 refrigerator in three years if the rate of inflation remains constant.

Question

The rate of inflation is 3%. The cost of an item in future years can be found by iterating the function c(x)=1.03x.

Answer 1

The formula you should use is

Future Value = Present Value*(1.03)^(years)

In this case, it would look like this:

FV = 1500*(1.03)^3