Whose up for a math challenge?
The Forever Stamp features the Liberty Bell image and the word "forever." It will always be available at the price of a First-Class Mail stamp in effect at the time of purchase. To introduce the stamp to the public, the Postal Service began offering the stamp on April 12, 2007 at 41 cents. Customers may use the stamp as soon as they wish, but stamp prices will not change until May 14. When prices change in the future, the Forever Stamp will sell at the new one-ounce, single-piece First-Class Mail price. It has been suggested that you might want to stock up on these new 41 cent stamps to avoid price hikes in postage in the future. Let’s see if this is a good idea.
On May 14, 1975 the single-piece First-Class Mail price was 10 cents for the first ounce. On May 14, 2007 the price will increase to 41 cents for the first ounce. What is the percent increase in the one-ounce, single-piece First-Class Mail price during that time period?
Suppose the United States Postal Service had made available a Forever Stamp on May 14, 1975 and Juan’s father was trying to decide if he should buy 1000 of the 10-cent stamps to protect against future price increases or invest the same amount of money. At what percent interest compounded annually would Juan’s father have had to invest his money on May 14, 1975 so that the amount of dollars he has in his investment exceeds the value of the postage of the 1000 stamps on May 14, 2007? Express your answer to the nearest tenth.
Assume the annual increase in the United States Postal Rate fits a linear model between May 14, 1975 and May 14, 2007. What has been the annual average increase in cents in the Postal Rate over this time span? Express your answer to the nearest tenth.