Question

The rate of inflation in a country is 1000%. An object costs 3 units today. How much it will cost after two years?

Answer 1

Answer:

Step-by-step explanation:

Use compound interest formula,

Amount = P [1 + (R/100)]^2

Amount = 3 [1 + (1000/100)]^2

Amount = 3* [1 + 10]^2

Amount = 3 * 11 *11 = 363 units.

Alternatively,

1st year 1000% of 3 = 30.

So, article cost = 30 +3 = 33 units.

Second Year 1000% of 33 is 330.

So article cost = 330 + 33 = 363 units.