Question

*HELP ASAP I WILL GIVE U BRAINLEAST* (20 POINTS)

You have inherited $8000 from your grandfather. Knowing that you will soon be going to college you decide to invest your money into an account that has an 8% interest rate that is compounded quarterly. How much money will you have in your account after 5 years?

a) Exponential growth or decay:
b) Identify the initial amount:
c) Identify the growth/decay factor:
d) Write an exponential function to model the situation:
e) “Do” the problem:

Answer 1

a) exponential growth b) 8000 c) 1.02 d) f(x) = 8000(1+.05/4)^(4)(5) e) $11887.58

Explanation:

This situation is exponential growth because the money will be increasing over time. The initial amount is the amount invested in the beginning so in this case 8000. The growth factor is found by 1+r/n where r is the rate and n is the number of compounds per year so 1 + .08/4 where the r is expressed as a decimal and compounding quarterly means 4 times per year. The function is modeled by f(x) = P(1 +r/n)^nt. Evaluating the function gives f(x) = 8000(1 + .08/4)^(4*5).