In 2012, every dollar (100¢) spent on grocery items was broken down as follows:

Labor  38.5¢

Farm value of food products  19.5¢

Advertising and packaging  12¢

Transportation  7.5¢

Rent and insurance  7¢

Taxes  6¢

Depreciation and repairs  5¢

Profit  4.5¢

Assume the transportation cost increases by 10%

per year and the labor cost increases by 4% per year for five years, with all other costs remaining constant. Determine the percent profit in the years 2012 and 2017, assuming the profit amount remains at 4.5¢.

Present Worth Calculations with Inflation