Prices are increasing at 2 per year A mistake has seen made

Prices are increasing at 2% per year. A mistake has seen made m the formula below .Provide the correct formula. A $6 item costs $6(0.02)^12 m twelve years\' time. Enter the exact answer. The correct formula is 6(.02)^12 dollars.

Solution

given price increasing at 2% per year

growth rate r =2% =2/100 =0.02

growth factor =1+0.02=1.02

initial price =$ 6

so

$ 6 item costs $ 6(1.02)¹² in 12 years time