word problem help

[jadisgrace]

what are the steps for solving this word problem and how do you solve those steps:

If the annual rate of inflation averages 5% over the next 10 years, then the approximate cost C of goods and services during any year in that decade will be given by
C(t)= P(1.05)^1 where "t" is the time in years and "P" is the present cost. If the price of Ailina's perfect pizza is $7.99, how much will it cost 9 years from now?

I tried looking this up on line but all I could find is annual inflation rate for the past to now. I do not know what this question is called (eg. liner equation, logarithm,radicals etc.) so it is hard to look it up. I tried plugging in the given info into the given formula and got:
C(9)= 7.99(1.05)
C(9) = 8.3895
[my teacher told us to round the final answer to the 3rd decimal place] this is where I got stuck because I do not know if this is how to do this problem. Also I do not know where the 5% inflation rate comes into effect.

 

[wjm11]

If the annual rate of inflation averages 5% over the next 10 years, then the approximate cost C of goods and services during any year in that decade will be given by
C(t)= P(1.05)^1 where "t" is the time in years and "P" is the present cost. If the price of Ailina's perfect pizza is $7.99, how much will it cost 9 years from now?

First, a correction is in order: the equation is NOT C(t)= P(1.05)^1. It is C(t)= P(1.05)^t.

In your case, t = 9. Try plugging in t = 9, not t = 1.
Re the 5%: The 5% appears in the "1.05". It is the .05 part. You must change the rate of increase from percent to decimal form, then add that number to 1.