Question

The value of a single stock in North Coast Pharmaceuticals was $50. The value increased 3% per month for 10 months.Which equation calculates y, the value of the stock after 10 months?

Answer 1

`y\text{ = 50}\cdot1.03^(10)`

Step-by-step explanation:

Here, we want to get the equation that represents the value of the stock after 10 months

This will follow an exponential pattern and we have it as follows:

`y=I(1+r)^n`

Where y is the value of the stock after 10 months

I is the initial value of the stock which is $50

r is the percentage increase which is 3% = 3/100 = 0.03

n is the number of months which is 10

Mathematically, we substitute these values into the equation above:

`\begin{gathered} y=50(1+0.03)^(10) \\ y\text{ = 50}\cdot1.03^(10) \end{gathered}`