Scott invests $1000 at a bank that offers 6% compounded annually. Write an equation to model the growth of the investment.

Question

asked Dec 17, 2018 11.0k views

2 Answers

Aakash Daga · Answer 1 · 2018-12-23T07:31:56+0000

Answer:

$A= 1000 \cdot (1.06)^t$

Explanation:

Using the formula for the growth of investment:

A = P(1+r)^t .....[1]

where,

A is the amount after t year

P is the Principal

r is the growth rate in decimal

As per the statement:

Scott invests $1000 at a bank that offers 6% compounded annually.

⇒P = $1000 and r = 6% = 0.06

substitute these in [1] we get;

A = 1000(1+0.06)^t

⇒
$A= 1000 \cdot (1.06)^t$

Therefore, an equation to model the growth of the investment is,

$A= 1000 \cdot (1.06)^t$