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22 January, 02:20

If prices increase at a monthly rate of 2.7 by what do they increase in a year

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  1. 22 January, 02:22
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    37.67%

    Step-by-step explanation:

    Suppose initially a price of $ 100

    Increasing per month at a rate of 2.7%. Which is equal to 0.027

    Now applying the formula:

    Vf = Vi * (1 + m) ^ n

    where Vf is the final quantity, Vi is the initial value, m is the rate and n is the number of months.

    We know that 1 year, is 12 months, since the rate is monthly means, n = 12, we replace:

    Vf = 100 * (1 + 0.027) ^ 12

    Vf = 137.67

    It means price increase in 1 year = 137.67 - 100 = 37.67

    Which means that n a year increases to 37.67%
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