### Home > CCAA8 > Chapter 6 Unit 7 > Lesson CCA: 6.1.4 > Problem 6-36

6-36.

An item currently costing $20 is increasing in cost by 5% per year.

What is the multiplier?

The cost is increasing, so the multiplier will be greater than 1.

1.05

What will the item cost five years from now?

The original cost would be multiplied by 1.05 for the first year, an additional 1.05 for the second year, an additional 1.05 every year after that.

$25.52

Write an equation to find the cost in

*n*years.

Use the starting value and multiplier to write an equation of the form

*t*(*n*) =*ab*^{n}