Inflation at a constant rate can be solved using the compound interest formula:
present value, P = 2.80
inflation rate, i = 2.8% = 0.028
period, n = 7 (years)
Value in 7 years,
future value
= P(1+i)^n
= 2.8(1.028)^7
= 3.3971
= 3.40 (to the nearest cent)
