1) say that the merchant originally purchased $10 in gold. therefore, due to inflation, the same amount of gold will cost $10.50 the next year. plus the extra 10% gets you a cost of $11.55 for the gold he buys the hext year. this means that after putting his $10 in the bank for a year he ended up with $11.55, so...

or 15.5%

I apologize but i am confused on the wording in problem 2, does the train travel more than 20 miles?

I am not sure what you mean when using "*" to the power to or multiply by?