Answer: $0.42
Step-by-step explanation:
The rate at which the average cost of 1 gallon of gasoline is increasing is exponential. We would apply the formula for exponential growth which is expressed as
y = b(1 + r)^ t
Where
y represents the cost after t years.
t represents the number of years.
b represents the initial cost.
r represents rate of growth.
From the information given,
b = $0.31
r = 3% = 3/100 = 0.03
t = 1972 - 1962 = 10 years
Therefore,
y = 0.31(1 + 0.03)^10
y = 0.31(1.03)^10
y = $0.42
