With time, t, in years since the start of 1980, textbook prices have increased at 6.7%

Chapter 1, Problem 46

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With time, t, in years since the start of 1980, textbook prices have increased at 6.7% per year while inflation has been 3.3% per year.68 Assume both rates are continuous growth rates. (a) Find a formula for B(t), the price of a textbook in year t if it cost $B0 in 1980. (b) Find a formula for P(t), the price of an item in year t if it cost $P0 in 1980 and its price rose according to inflation. (c) A textbook cost $50 in 1980. When is its price predicted to be double the price that would have resulted from inflation alone? 4

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