Question

You decide to invest $250 in an account that yields a return of approximately 4% each year. If you were to write an exponential equation representing the situation, what would the initial value be?

Answer 1

The initial value in an exponential equation for your investment scenario would be $250, which reflects the starting principal you invest at a 4% annual return.

Step-by-step explanation:

The initial value in an exponential equation representing an investment situation is the amount of money you start with, before any interest has been added.

In this case, if you invest $250 in an account with a 4% annual return, the initial value (often referred to as the principal) in your exponential equation would be $250.

An example of the exponential equation for your investment might look like this:

P(t) = P0 × (1 + r)t

where:

P(t) is the amount of money in the account after t years,

P0 is the initial investment, which is $250,

r is the annual interest rate (0.04 for 4%), and

t is the number of years.