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3 years ago

8

Inflation causes things to cost more, and for our money to buy less. Suppose inflation decreases the value of money by 5% each y

ear. In other words, if you have $1 this year, next year it will only buy you $0.95 worth of stuff. How much will $100 buy you in 10 years?

1 answer:

nlexa [21]3 years ago

4 0

Answer: 99.95

Step-by-step explanation: If you substract 100-5% you get 99.95

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suppose you deposit $1000 in a savings account that pays 4.8% interest compounded monthly. Write an exponential function to mode

zubka84 [21]

Answer:

The exponential function is $A(t) = 1000(1.004)^{12t}$ .

You will have $1,100.55 in the account after 2 years.

Step-by-step explanation:

Compound interest:

The compound interest formula is given by:

$A(t) = P(1 + \frac{r}{n})^{nt}$

Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time in years for which the money is invested or borrowed.

Deposit $1000 in a savings account that pays 4.8% interest compounded monthly.

This means that $P = 1000, r = 0.048, n = 12$ . So

$A(t) = P(1 + \frac{r}{n})^{nt}$

$A(t) = 1000(1 + \frac{0.048}{12})^{12t}$

$A(t) = 1000(1 + 0.004)^{12t}$

$A(t) = 1000(1.004)^{12t}$

This is the exponential function

How much will you have in your account after 2 years?

This is A(2). So

$A(2) = 1000(1.004)^{24} = 1100.55$

You will have $1,100.55 in the account after 2 years.

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