Question

Suppose that an investment of $13,000 grows in value at a rate of 9% per year. What is the growth factor for this investment?

a.
0.09
c.
1.09
b.
1/9
d.
9

Answer 1

growth rate is 9%,
so your growth factor will be (100+9)% = 109% = 109/100 = 1.09

Answer 2

Answer: c. 1.09

Explanation:

The exponential growth equation is given by :-

`f(x)=A(1+r)^x`, where A is the initial amount , r is the rate of growth and x is the time period.

Here growth factor = 1+r

Given: The Initial value = $13,000

Rate of growth = 9%=0.09

Then, the exponential growth equation for the given investment will be

`f(x)=13,000(1+0.09)^x\\\\\Rightarrow\ f(x)=13,000(1.09)^x`

Here , the growth factor = 1.09