Question

You model your investment account using the formula y = 20000(1.035)x where x represents the

number of years and y represents the account balance after x years. What is the growth rate of your
investment?

Answer 1

The formula given for the investment account is an exponential growth model, where the initial investment is $20,000 and the growth rate is represented by the base of the exponential function, which is 1.035.

The growth rate of the investment can be found by subtracting 1 from the base of the exponential function and converting the result to a percentage:

growth rate = (base - 1) x 100%

growth rate = (1.035 - 1) x 100%

growth rate = 0.035 x 100%

growth rate = 3.5%

Therefore, the growth rate of the investment is 3.5%.

Answer 2

Explanation:

The growth rate of the investment is represented by the constant multiplier in the exponential term of the formula y = 20000(1.035)x. In this case, the constant multiplier is 1.035, which represents the annual growth rate of the investment account.

To calculate the growth rate as a percentage, we can subtract 1 from the constant multiplier, and then multiply the result by 100.

So, the growth rate of the investment is:

1.035 - 1 = 0.035

0.035 * 100 = 3.5%

Therefore, the growth rate of the investment is 3.5%.