Solution:
The future price p(t), in dollars, can be modelled by the exponential function;
[tex]p(t)=800(1.025)^t[/tex]
(a) The current price is;
[tex]\begin{gathered} t=0; \\ \\ p(0)=800(1.025)^0 \\ \\ p(0)=800(1) \\ \\ p(0)=800 \end{gathered}[/tex]
ANSWER: $800
(b) The price 8 years from today;
[tex]\begin{gathered} t=8 \\ \\ p(8)=800(1.025)^8 \\ \\ p(8)=800(1.2184) \\ \\ p(8)=974.72 \\ \\ p(8)\approx975 \end{gathered}[/tex]
ANSWER: $975
