This data set is based on the first class letter postage for the US Mail from 1933 to 1996. Plot the data and develop a prediction function. When will the cost of a first class postage stamp reach $1.00? when will the cost be 64 cents? how soon should we expect the next 3 cent increase?
Plotting the data:
As you can see, it is an exponential function.
Let’s find a function that best fits the data by selecting ‘add a trendline’ in Microsoft Excel to display the best fit function.
So, the function that best fits this set of data is
y = 2E – 33e0.0394x, where the x is the year and the y is the cost of a stamp (in cents).
When you add the current and future data to the data set above you get:
The cost of a first class postage stamp will reach $1.00 in the year 2028. The cost will be $0.64 in the year 2017. In 2010, we should expect a $0.03 increase according to our prediction equation.