The annual inflation rate is 33 per year If a movie ticket c

The annual inflation rate is 3.3% per year. If a movie ticket costs $9.50 today, find a formula for p, the price of a movie ticket t years from today, assuming that movie tickets keep up with inflation. P = f (t) = help (formulas) According to your formula, how much will a movie ticket cost in 20 years? help (numbers)

Solution

(a)Given initial cost= $9.5=C

Annual rate of inflation=3.3%=3.3/100=0.033

therfore after t year price of movie ticket=P=f(t)=C(1+r)^t=9.5(1+0.033)^t=9.5(1.033)^t

(b) when t=20 year

P=f(20)=9.5(1.033^20=$18.1857