To find the cost of the goods after two years we are going to use the formula:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]where P is the cost now, r is the inglation rate in decimal form, n is the number of times the interest is taken per year and t is the time.
In this case we have P=$300.00, r=0.07, n=1 (once per year) and t=2 (two years). Plugging this values we have:
[tex]A=330(1+\frac{0.07}{1})^{1\cdot2}=377.82[/tex]Therefore after two years the cost will be $377.82
