(b) If, on the other hand, the cost of the frozen pizza increased by 5% of the original cost each year for 11 years, how would that compare to your answer from part (a)? Round all intermediate calculations and the final answer to the nearest cent.

The frozen pizza would cost $? Less or more?

In this scenario, the frozen pizza's price increases by a fixed amount each year, specifically 5% of the original price each year, rather than compounding on the previous year's price. To find out how this compares to the compound interest method from part (a), let's calculate the total price after 11 years under this new method.

### Step 1: Calculate the annual increase
The annual increase is 5% of the original price.

\[
\text{Annual Increase} = 0.05 \times 4.85 = 0.2425
\]

### Step 2: Calculate the total increase over 11 years
Since the increase is the same every year, multiply the annual increase by 11:

\[
\text{Total Increase Over 11 Years} = 0.2425 \times 11 = 2.6675
\]

### Step 3: Calculate the final price after 11 years
Add the total increase to the original price to find the final price:

\[
\text{Final Price} = 4.85 + 2.6675 = 7.5175
\]

Rounding to the nearest cent:

\[
\text{Final Price} \approx 7.52
\]

### Step 4: Compare with the compounded price
From part (a), the price after 11 years with compounding was approximately $8.30. Now we compare:

\[
8.30 - 7.52 = 0.78
\]

So, under this method, the frozen pizza would cost **$0.78 less** than with the compound interest method.

Would you like more details or have any questions? Here are some related questions:

1. How much would the pizza cost after 11 years if the increase was 10% of the original price each year?
2. How would the price change if the increase percentage was based on the previous year's price but still not compounded?
3. What would the price be after 11 years if the pizza price increased by a fixed dollar amount each year?
4. How does the final price differ if the increase occurs quarterly rather than annually?
5. If the pizza price decreased by 5% annually, what would the price be after 11 years?

**Tip:** Understanding the difference between compound and simple increases is essential in financial planning, as the effects can significantly impact long-term costs.

Explore how the price of frozen pizza changes over 11 years with a 5% annual increase compared to compound interest. Understand the impact of fixed percentage increases versus compound growth in financial planning.

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