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

Final value (FV) of the investment: ,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 .
• On the second year, if he invest this 17,100 on the same investment option, he would get .
• 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: , where FV is the final value of what Jimmy would get   for investing the \$15,000 “t” periods.
2. 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