



 
Hi Cassie. If you assume that the rate of inflation is constant (it isn't, but for the purposes of the question we assume it is), then the price rises each year by the inflation rate times the previous year. So let r = the annualized inflation rate + 1. Since you have 25 years, you are multiplying the original amount ($3) by r 25 times to get the later amount ($45). So 3 x r^{25} = 45. This means r^{25} = 15. If you use your calculator, you can find r. On my calculator, I type 25, then , then 15. The second question is really the same as the first, but with different numbers. Cheers,  


Math Central is supported by the University of Regina and The Pacific Institute for the Mathematical Sciences. 