Question

Ian has a bank account that earns interest. The value, V, in dollars, of Ian's account after t years can be modeled by the exponential function V(t)=5000(1.025)t.Ian claims that the value of his bank account grows by an equal factor each year. To prove his claim, which equation must he show to be true?

Answer 1

Answer: A

Since the account grew by the same amount each year, the difference between the two consecutive years should be equal.

This would mean that:

`V(t)-V(t+1)=1.025`

Therefore the answer is A.