From 1992 through 2007, the purchasing power of a dollar decreased by about 3.5% per a year. Using 1992, as the base for comparison, what was the purchasing power of a dollar in 2007? Formula: y=C (1-r) t

$0.48

$0.57

$0.44

$0,59

Answer: fourth option $0.59

Explanation:

1) Given formula: y=C (1-r) ^t

I will change t for x just due to editor limitations: y = C (1-r) ˣ

2) In that:

C = $1,

r = 3.5% = 3.5/100 = 0.035

x = t = 2007 - 1992 = 15

3) Compute

y = $1 (1 - 0.035) ¹⁵ = $1 (0.965) ¹⁵ = $0.586 ≈ $0.59

Answer: $0.59