CL 6-153 In 2012 the average cost for a new midsized car was about
$31,000. New car prices tend to go up about 2% every year.
a. What is the multiplier for this situation?
b. If this trend continues, what will the cost be in 4 years?
c. Write an equation to calculate the cost in n years. What does
each of the factors in your equation represent?

A) The multiplier for this situation is 0.02.

B) The cost in 4 years will be $ 33,555.39.

C) 31,000 x 1.02 ^ N = X

Step-by-step explanation:

Since in 2012 the average cost for a new midsized car was about $ 31,000, and new car prices tend to go up about 2% every year, to determine what is the multiplier for this situation, what will the cost be in 4 years if this trend continues and to write an equation to calculate the cost in n years the following calculations must be performed:

A)

31,000 x 2/100 = X

31,000 x 0.02 = X

Thus, the multiplier for this situation is 0.02.

B)

31,000 x 1.02 ^ 4 = X

33,555.39 = X

Thus, the cost in 4 years will be $ 33,555.39.

C)

31,000 x 1.02 ^ N = X

Here, N represents the number of years over which the price increase will be calculated, and X represents the price after that number of years.