Question

Marilyn collects old dolls. She purchases a doll for $450. Research shows the doll's value with increase by 2.5% each year.

Answer 1

Answer:

$\ 737.38$

Step-by-step explanation:

we know that

The equation of a exponential growth function is given by

$y=a(1+r)^x$

where

y is the value of the doll

x is the number of years

a is the initial value

r is the rate of change

we have

$a=\ 450\\r=2.5\%=2.5/100=0.025$

substitute

$y=450(1+0.025)^x$

$y=450(1.025)^x$

What will be the value of the doll in 20 years?

For x=20 years

substitute in the equation

$y=450(1.025)^{20}=\ 737.38$