Inflation is generally described as the increase over time of the cost of a particular product or
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Inflation is generally described as the increase over time of the cost of a particular product or service. The rate of inflation depends on many factors and does not remain constant. Inflation causes the value of a dollar to decrease over time. Over the past ten years, the average rate of inflation was 2.4 %.
(a) Suppose a house costs $165,000 today. If the average rate of inflation continues at this same rate, estimate the cost of a similar house in 10 years.
(b) Find the cost of a $50 pair of jeans in 5 years.
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