how long will it take for prices in the economy to double at

how long will it take for prices in the economy to double at a 9% annual inflation rate? round the answer to the nearest hundredth. (please include steps or equation being used!)

Solution

A=P(1+r)^t

r is inflation rate =9%=0.09

P=initial prices

t= time in years

A=price after t years

given prices in the economy double s

A=2P

2P=P(1+0.09)^t

2=(1.09)^t

t=ln_1.092

t=ln2/ln1.09

t=8.04years

it takes 8.04 years for prices in the economy to double at a 9% annual inflation rate