Question

Please dont use any big words & give an essay explanation

Answer 1

We want to create a real-life reasonable problem in which we can apply the laws of exponents.

Using a compound interest example;

Word Problem:

Calculate the final value of a $2,000 investment in an account with a 5% interest compounded Quarterly for 5 years.

Solving the word problem;

We have the following parameters;

`\begin{gathered} \text{ Principal P = \$2,000} \\ \text{Rate r = 5\%} \\ \text{Time t = 5 years} \\ \text{ Number of times compounded n = 4} \end{gathered}`

Recall that the formula for compound interest is;

`F=P(1+(r)/(n))^(nt)`

Substituting the given values;

`\begin{gathered} F=2000(1+(0.05)/(4))^(4(5)) \\ F=2000(1+0.0125)^(20) \\ F=2000(1.0125)^(20) \\ F=2000*(1.0125)^(20) \\ F=\text{ \$2,564.07} \end{gathered}`

Therefore, the solution to the problem is;

The final