Rate of annual increase
Step-by-step explanation:
Given that the expression
models the average annual per capita health care costs, in dollars, in the US as a function of the number of years t since 1970
.
1.076 in the expression
represents the rate of annual increase of the annual per capita health care costs (in dollars).
Take for example,
In Year 1, when t=1, ![475\cdot1.076^{1}](/tpl/images/0590/7074/e1ad0.png)
In Year 2, when t=2, ![475\cdot1.076^{2}=475\cdot1.076\cdot1.076=(Year 1)\cdot1.076](/tpl/images/0590/7074/c1b2d.png)
Once we know the annual per capita health care costs for the previous year, we simply multiply it by 1.076 or for any number of years, raise it to t years.