Reasoning The function that models the growth of a $1000 investment that earns 7 % per year is f ( x ) = 1000 ( 1.07 ) x . How do you think you would write a function that models the growth of $1500 that earns 8 % per year? Use that function to determine how much money a person would have after 5 years if she invested $1500 in an account earning 8 % per year.
Reasoning The function that models the growth of a $1000 investment that earns 7 % per year is f ( x ) = 1000 ( 1.07 ) x . How do you think you would write a function that models the growth of $1500 that earns 8 % per year? Use that function to determine how much money a person would have after 5 years if she invested $1500 in an account earning 8 % per year.
Reasoning The function that models the growth of a $1000 investment that earns
7
%
per year is
f
(
x
)
=
1000
(
1.07
)
x
.
How do you think you would write a function that models the growth of $1500 that earns
8
%
per year? Use that function to determine how much money a person would have after 5 years if she invested $1500 in an account earning
8
%
per year.
Expert Solution & Answer
To determine
To calculate:The function that models the growth of a $1000 investment that earns 7% per year is f(x)=1000(1.07)x. How do you think you would write a function that models the growth of $1500 that earns 8% per year? Use that function to determine how much money a person would have after 5 years if she invested $1500 in an account earning 8% per year.
Answer to Problem 29P
After 5 years person will have $2203.99 money
Explanation of Solution
Given information:The given model of the growth of $1000 investment that earns 7% per year is f(x)=1000(1.07)x.
Calculation:From the given function we can write the general model of the growth function, i.e. f(x)=a(1+r100)x , where
a= money invested
r= rate of growth, and
x= time period in years
so for the given value, the model of growth is
f(x)=1500(1+8100)xf(x)=1500(1.08)x
Here time duration is 5 years, so x=5
f(5)=1500(1.08)5
f(5)=1500*1.4693f(5)=2203.99
Hence after 5 years person will have $2203.99 money.
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