Repeated percentages

1
Repeated percentages

• Example Due to inflation, prices increase by 5
  per year. An item costs 12 now. What will it
  cost in 2 years time?

After 1 year 12 x 1.05 12.60
After 2 years 12.60 x 1.05 13.23
Repeated 12 x 1.05 x 1.05 12 x (1.05)²
2

• Each year a car loses its value by 12 at the
• beginning of the year. A brand new Ford Fiesta
• costs 7549. Find its value after 3 years.

100 - 12 88
After 1 year 7549 x 0.88 6643.12
After 2 years 6643.12 x 0.88 5845.9456
After 3 years 5845.9456 x 0.88
5144.43 OR 7549 x (0.88)³ 5144.43