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In Business / High School | 2025-07-08

TABLE 1: INFLATION RATE | Year | Percentage Rate | |---|---| | 2021 | 4.61% | | 2022 | 7.04% | | 2023 | 6.00% | | 2024 | 5.30% | | 2025 | 4.50% | Explain the term inflation rate in the given context. In 2023, Susan paid R18,999.00 for her new Hisense 85-inch TV. Calculate the predicted cost of the same TV in 2025.

Asked by mgpc93221

Answer (1)

Inflation rate is a measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. In the context of the given table, the inflation rate represents the percentage increase in prices over a particular year compared to the previous year.
To calculate the predicted cost of Susan's TV in 2025, we need to adjust the 2023 price by the inflation rates for the years 2024 and 2025. This involves calculating the compounded increase in price based on the inflation rates.
The formula to calculate the future price considering inflation rates is:
Future Price = Current Price × ( 1 + Inflation Rate 2024 ​ ) × ( 1 + Inflation Rate 2025 ​ )
Given:

Current Price in 2023 = R18,999.00
Inflation Rate for 2024 = 5.30% = 0.053
Inflation Rate for 2025 = 4.50% = 0.045

Substitute the values into the formula:
Future Price = 18999 × ( 1 + 0.053 ) × ( 1 + 0.045 )
Calculate step-by-step:

First, adjust for the 2024 inflation rate: 18999 × 1.053 = 20000.947

Next, adjust this result for the 2025 inflation rate: 20000.947 × 1.045 = 20900.999315


Therefore, the predicted cost of the TV in 2025 is approximately R 20 , 901.00 (rounded to the nearest cent).

Answered by DanielJosephParker | 2025-07-21

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