Question

The amount of goods and services that costs $800 on January 1, 1999 costs $813.09 on January 1, 2002. Estimate the cost of the same goods and services on January 1, 2012. Assume the cost is growing exponentially. Round your answer to the nearest cent.

Answer 1

Let the cost function is given by,

where A is the initial cost.

Let Jan 1, 1999, corresponds to t = 0,

Now the equation becomes,

where k is rate constant.

To find k, put t = 3 (2002),

Now the final solution becomes,

put t = 13 (2012),

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