If the $10.61 cost in 1972 is equal to $68.69 in 2013, then what rate of inflation, i%=?, was used to determine the 2013 costs? Express your answer as a %.

inflation rate = 4.66%

Explanation:

we can determine the inflation rate using the future value formula:

future value = present value x (1 + i)ⁿ

$68.69 = $10.61 x (1 + i)⁴¹

(1 + i)⁴¹ = $68.69 / $10.61 = 6.474081056

⁴¹√(1 + i)⁴¹ =  ⁴¹√6.474081056

1 + i = 1.0466

i = 1.0466 - 1 = 0.0466 = 4.66%

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%