Jimmy recently graduated from college and put the $15000 gift from his grandparents in an investment that increases by %14 each year. Write

Question

Jimmy recently graduated from college and put the $15000 gift from his grandparents in an investment that increases by %14 each year. Write the equation that models this equation.

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Maria 2 weeks 2021-09-10T08:06:03+00:00 2 Answers 0

Answers ( )

    0
    2021-09-10T08:07:14+00:00

    Answer:

    Final value (FV) of the investment: FV= 15,000\times1.14^t,where t are the amount of years the money were invested.

    Step-by-step explanation:

    • If Jimmy uses this money to invest, and the investment return is 14% each year, this means that, at the end of the first year, Jimmy would get  17,100= 15,000\times (1+14\%)=15,000\times1.14.
    • On the second year, if he invest this 17,100 on the same investment option, he would get 19,494=17,100\times1.14=15,000\times1.14\times1.14=15,000\times1.14^2.
    • The same would apply to the third year.
    • We can re-writte the calculation to know how much Jimmy would get, depending on the amount of years the money was invested as follow: FV=15,000\times1,14^t, where FV is the final value of what Jimmy would get   for investing the $15,000 “t” periods.
  1. Charlotte
    0
    2021-09-10T08:07:35+00:00

    Answer:

    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

    A = P(1+r/n)^nt

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = 15000

    r = 14% = 14/100 = 0.14

    n = 1 because it was compounded once in a year.

    Therefore, the equation that models this situation is

    A = 15000(1 + 0.14/1)^1 × t

    A = 15000(1.14)^t

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