Question

Asked Aug 26, 2019

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Step 1

a)

To determine the value of a 2001 constant dollar at the end of 1997.

Compute the value of *t* as follows.

t =1997− 2001

t = −4

Substitute *t* = −4 in d(t) = −0.023t + 1.00.

d(−4) = −0.023(−4) + 1.00

d(−4) = 1.092

Thus, the value of a 2001 constant dollar at the end of 1997 is **$1.09**.

Step 2

Similarly compute the value of a 2001 constant dollar at the end of 2009 as follows.

t = 2009 − 2001

t = 8

Substitute *t* = 8 in d(t) = −0.023t + 1.00.

d(8) = −0.023(8) + 1.00

d(8) = 0.816

Thus, the value of a 2001 constant dollar at the end of 2009 is **$0.82**.

Step 3

b)

To determine the year when the value of a 2001 constant dollar is below 85 cents or 0.85 dollars.

Substitute d(t) = 0.85 in d(t) = −0.023t + 1.00.

0.85 = −0.023t + 1.00

t = 6.5

It...

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