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The problem asks how much an item that now costs $4,800 would have cost 6 years ago, given an annual inflation rate of 2.63%.

This can be solved using the formula for inflation adjustment:

\[
\text{Price in previous years} = \frac{\text{Current Price}}{(1 + r)^t}
\]

Where:
- $ r = 0.0263 $ (annual inflation rate of 2.63%)
- $ t = 6 $ (years ago)
- Current Price = $4,800

Let's calculate that now.The item that now costs $4,800 would have cost approximately **$4,107.67** six years ago, given an annual inflation rate of 2.63%.

Would you like any more details on the steps, or do you have any further questions?

Here are 5 related questions you might find useful:
1. How do we calculate future prices with inflation over time?
2. What happens if inflation is compounded more frequently than annually?
3. How can we calculate inflation-adjusted interest rates?
4. How does the inflation rate impact long-term investments?
5. What is the difference between nominal and real price adjustments?

**Tip:** Always ensure you use the correct compounding period (e.g., yearly, monthly) when calculating inflation adjustments!

With an annual inflation rate of 2.63%, how much did an item that now costs $4,800 cost 6 years prior?

Calculate how much an item costing $4,800 today would have cost 6 years ago with an annual inflation rate of 2.63%. This problem covers inflation adjustment, algebraic calculations, and exponential decay. Suitable for students in Grades 9-12.

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