Question

The value of Adam's model railway is $550.

This value increases exponentially at a rate of r %
per year.
At the end of 5 years the value will be $736.
Calculate the value of r.

Answer 1

Answer:(c)

Explanation:

Given

The initial value of Adam's model is
`A_o=\$550`

the value increases exponentially with the rate of
`r\%`

Time period
`t=5\ years`

Final amount
`A=\$736`

Exponential growth is given by

`\Rightarrow A=A_o(1+r)^t`

Putting values

`\Rightarrow 736=550(1+r)^5\\\\\Rightarrow (1+r)^5=1.338`

`\Rightarrow 1+r=1.05999\\\Rightarrow r=0.05999\ or\ 5.99\%\approx 6\%`

Option (c) is correct