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A bar of soap cost R8,51 in 2014. If the inflation rate in 2015 was 6,3%, what would be the price of the soap in 2015?
Economics
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Step-by-step solution
4 stepsIdentify the given values.
The current price of the soap (in 2014) is R8,51.
The expected inflation rate for 2015 is 6,3%.Convert the inflation rate to a decimal.
Calculate the price in 2015 using the inflation formula.
The future price (FV) is calculated as:
Where is the present value.
Substitute the given values:
Round the answer to two decimal places, as it represents currency.
The price of the soap in 2015 will be R9,05.
The final answer is .
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