Homework Answers
Current price, P0 = $ 1.50
Rate of Inflation = 50% per month
Due to inflation the price after a month will be equal to
Price (after a month) = P0(1+Inflation)
Price = 1.5*(1+0.5) = 1.5 *1.5 = $ 2.25
After a month the donut will cost = $ 2.25
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