Question

1600 dollars is placed in an account with an annual interest rate of 5.25%. How much will be in the account after 25 years, to the nearest cent?

Answer 1

Step-by-step explanation:

Exponential Functions:

y=ab^x

y=ab

x

a=\text{starting value = }1600

a=starting value = 1600

r=\text{rate = }5.25\% = 0.0525

r=rate = 5.25%=0.0525

\text{Exponential Growth:}

Exponential Growth:

b=1+r=1+0.0525=1.0525

b=1+r=1+0.0525=1.0525

\text{Write Exponential Function:}

Write Exponential Function:

y=1600(1.0525)^x

y=1600(1.0525)

x

Put it all together

\text{Plug in time for x:}

Plug in time for x:

y=1600(1.0525)^{25}

y=1600(1.0525)

25

y= 5750.0628984

y=5750.0628984

Evaluate

y\approx 5750.06

y≈5750.06