Question

during the worst periods of hyperinflation in a certain country, the price of food increased at a rate of 30% per month. state whether this increase was linear or exponential. if your food bill was $80 in one month during this period, what was it three months later?

was the growth in inflation linear or exponential?
linear
exponential

Explanation:

Identify the type of growth rate

$$ r = 30\% \text{ per month} $$

Analyze constant percentage growth

$$ P(t) = P_0(1 + r)^t = P_0(1.30)^t $$

Classify the growth type

$$ \text{Growth is exponential because it increases by a constant percentage rate.} $$

Answer:

• linear
• exponential (Correct answer)