Suppose That Inflation Is 3% Per Year

Multiple Choice

Suppose that inflation is 3% per year. This means the cost of an item increases by 3% each year. Suppose a jacket cost $150 in 2011. Find a formula that gives the cost of the jacket C in dollars after t years.

A) C = $150 + 1.03^t
B) C = $150 × 1.03^t
C) C = $150 × 1.3^t
D) C = $150 + 1.3^t