Part 1 of The Series: Health

Algebra Level 2

Average health premiums have been increasing at a rate of 10%. If an average family's premiums are $12,000 this year, what will they be in 4 years?

If necessary, round your answer to the nearest cent.

$999.50 $250.33 $1,002.50 $17,569.20

2 solutions

Noah Smalls
Feb 12, 2017

The formula for exponential growth is

y = a(1 + r)t

where a is the initial amount, r is the rate of increase expressed as a decimal, t is the time elapsed, and y is the final amount.

Plug in $12,000 for the initial amount, 0.1 for the rate of increase, and 4 years for the time elapsed.

y = a(1 + r)t

y = 12,000(1 + 0.1)^4 Plug in

y = 12,000(1.1)^4 Add

y = 12,000(1.4641) Simplify

y = 17,569.2

The correct formula for exponential growth is:

$y = a(1 + r)^t \text { instead of } y = a(1 + r)t$

Zee Ell - 4 years, 3 months ago

Okay I always understood there was 2 but...

Noah Smalls - 4 years, 3 months ago

Then please either use LaTex or at least the ^ symbol (what you have used later).

Zee Ell - 4 years, 3 months ago

Blan Morrison
Jan 12, 2018

Since health premium rates are increasing, that means the solution must be greater than 12,000. $17,569.20 is the only one that does this.