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What is the answer for question 11) ? http://postimg.org/image/yap8msn29/

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What is the answer for question 11) ?

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Posted (Answer #1)

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At present price of the gasoline is P =.90$

Inflation=2.5% per year=.025

Price of gasoline  after 10 year increase exponentially as

`A_f=P(1+2.5/100)^10`

`=.90(1.025)^10`

`=1.1521 $`

Thus price of 60 litres gasoline= 60x1.1521 =69.1246 $

= 69 $.

(i) Production cost . also influence price.

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