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Jason invests $100 at a bank that offers 6% interest compounded annually. Write an equation to model the growth of the investment.

User Cy Bu
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Final answer:

The growth of Jason's investment with an annual compound interest rate of 6% can be modeled by the equation A = 100(1.06)^t, where 'A' represents the accumulated amount after 't' years.

Step-by-step explanation:

To model the growth of Jason's investment with compound interest, we use the formula A = P(1 + r/n)^(nt), where:

  • A is the amount of money accumulated after n years, including interest.
  • P is the principal amount (the initial amount of money).
  • r is the annual interest rate (decimal).
  • n is the number of times that interest is compounded per year.
  • t is the time the money is invested for in years.

For Jason's investment:

  • P = $100
  • r = 6% or 0.06
  • n = 1 (since the interest is compounded annually)
  • t = 1 (if we're looking at one year)

The equation for the growth of the investment for any number of years t would be:

A = 100(1 + 0.06/1)^(1*t)

Simplified, the equation is:

A = 100(1.06)^t

This equation can be used to calculate the investment's value after any number of years t.

User Jkelley
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