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Shelly invested $1,000 at a rate of 5% interest per year. Which equation models the value of the investment, V, after t years?

User Atri
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1 Answer

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Answer:

Explanation:

You don't say whether this is compound interest or simple interest.

I will assume it's compounding that interests you.

The appropriate formula is

A = P(1 + r)^t, where r is the interest rate as a decimal fraction, t is the time in years, and P is the original amount. Thus:

A = $1000·(1 + 0.05)^t, or A = $1000·(1.05)^t

Please note: There were apparently possible answer choices. Next time, please be sure to list such choices. Thank you.

User Kris Zyp
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