Chapter1: Making Economics Decisions
Section: Chapter Questions
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![### Understanding Inflation Rates: Calculating the Current Price of Gasoline
#### Problem Statement:
The inflation rate on gas is 13%. If the price of gas was $2.15 per gallon, what is the price today?
#### Solution:
To find the current price of gas, we need to calculate the percentage increase due to inflation and add it to the original price.
1. **Calculate the inflation amount**:
\[
\text{Inflation Amount} = \text{Original Price} \times \frac{\text{Inflation Rate}}{100}
\]
\[
\text{Inflation Amount} = 2.15 \times \frac{13}{100} = 2.15 \times 0.13 = 0.2795
\]
2. **Add the inflation amount to the original price**:
\[
\text{Current Price} = \text{Original Price} + \text{Inflation Amount}
\]
\[
\text{Current Price} = 2.15 + 0.2795 = 2.4295
\]
3. **Round to the nearest hundredth**:
\[
\text{Current Price} \approx 2.43
\]
Thus, the current price of gas after accounting for the inflation rate is approximately $2.43 per gallon.
#### Interactive Component:
**Current price = $[ ]**
*Round to the nearest hundredth.*
[Enter]
#### Explanation:
This example demonstrates how to apply a percentage increase to a given value. Inflation rates can significantly affect the prices of commodities over time, and understanding how to calculate these changes is essential for budgeting and financial planning.
© 2022 International Academy of Science. All Rights Reserved.
---
#### Additional Interactive Features:
- Beneath the interactive component, a real-time calculator widget could be added to allow students to input different inflation rates and original prices to see how the current price changes accordingly.
- Graphical representations showing the original price, inflation amount, and current price can help in visualizing the step-by-step calculation process.
This interactive approach not only teaches the mathematical formula but also engages students in the learning process through practical application and real-world examples.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff088ce9f-d05d-4504-bead-a46762a42106%2F79fca5ba-44d7-4f43-ba40-b899ba499229%2Fjgc93q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Understanding Inflation Rates: Calculating the Current Price of Gasoline
#### Problem Statement:
The inflation rate on gas is 13%. If the price of gas was $2.15 per gallon, what is the price today?
#### Solution:
To find the current price of gas, we need to calculate the percentage increase due to inflation and add it to the original price.
1. **Calculate the inflation amount**:
\[
\text{Inflation Amount} = \text{Original Price} \times \frac{\text{Inflation Rate}}{100}
\]
\[
\text{Inflation Amount} = 2.15 \times \frac{13}{100} = 2.15 \times 0.13 = 0.2795
\]
2. **Add the inflation amount to the original price**:
\[
\text{Current Price} = \text{Original Price} + \text{Inflation Amount}
\]
\[
\text{Current Price} = 2.15 + 0.2795 = 2.4295
\]
3. **Round to the nearest hundredth**:
\[
\text{Current Price} \approx 2.43
\]
Thus, the current price of gas after accounting for the inflation rate is approximately $2.43 per gallon.
#### Interactive Component:
**Current price = $[ ]**
*Round to the nearest hundredth.*
[Enter]
#### Explanation:
This example demonstrates how to apply a percentage increase to a given value. Inflation rates can significantly affect the prices of commodities over time, and understanding how to calculate these changes is essential for budgeting and financial planning.
© 2022 International Academy of Science. All Rights Reserved.
---
#### Additional Interactive Features:
- Beneath the interactive component, a real-time calculator widget could be added to allow students to input different inflation rates and original prices to see how the current price changes accordingly.
- Graphical representations showing the original price, inflation amount, and current price can help in visualizing the step-by-step calculation process.
This interactive approach not only teaches the mathematical formula but also engages students in the learning process through practical application and real-world examples.
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