By: Ginger Rhodes

Problem: The following data is based on the first class letter postage for the US Mail from 1933 to 2002. Can you believe stamps used to cost 2 cents? 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? All of these questions can be answered by finding the best fit equation. This graph looks like an exponential growth, y = a bx, where x will be the year and y will be the rate.

Now, how can this exponential equation help answer those previous questions? Let’s look at a spreadsheet with some additional values.

 Year Rate (in cents) Exponential Equation 1919 2 1 1932 3 2 1958 4 6 1963 5 8 1968 6 10 1971 8 11 1974 10 12 1975 13 13 1978 15 14 1981 20 16 1985 22 19 1988 25 21 1991 29 24 1994 32 27 1997 33 30 1999 34 33 2002 37 37 2004 ? 40 2006 ? 43 2008 ? 46 2010 ? 50 2015 ? 61 2016 ? 64 2025 ? 91 2026 ? 95 2027 ? 99 2028 ? 103

From this table of values we can predict the next 3 cent increase to occur next year. Stamps will cost 64 cents in 2016 and over a dollar in 2028!! We will have to wait and see how accurate our prediction model is.