Question

Write an exponential equation that represents the given situation. You invest $1000 and it increases 12% each year. Can you teach me it because i need to show my work, thank you

Answer 1

FV= 1,000*(1.12^n)

Explanation:

Giving the following information:

Initial investment= $1,000

Increase rate= 12% = 0.12

We need to formulate an exponential equation to show the value in n years.

To calculate the Future Value, we need to use the following formula:

FV= PV*(1+i)^n

Being:

FV= Future Value

PV= Initial Investment

i= increase rate

n= number of periods

FV= 1,000*(1.12^n)

For example, for one year:

FV= 1,000*(1.12^1)

FV= $1,120

For 3 years:

FV= 1,000*(1.12^3)

FV= $1,404.93