Question

If $7500 is invested at an interest rate of 5% each year, what is the value of the investment in 4 years? Write an exponential function and solve.

Answer 1

F(x)= 7500*(1+0.05)^4=9116,29 

Answer 2

Answer:

An exponential function is:  $A(t) = P(1+r)^t$    

Value of the investment in 4 years is, $9,116.29688

Step-by-step explanation:

Using formula of an exponential function

$A(t) = P(1+r)^t$             .....[1]

where

A(t) is the amount

P is the principal

r is the rate of interest in decimal

t is the time in years

As per the statement:

P = $7500

r = 5% = 0.05

t =4 years

then substitute these in [1] we get;

$A(4) = 7500(1+0.05)^4$

⇒$A(4) = 7500(1.05)^4$

Simplify:

$A(4) = 7500 \cdot 1.21550625 = \ 9,116.29688$

Therefore, the value of the investment in 4 years is, $9,116.29688