Consider the exponential function f(x)=1,250cdot1.08^x which models the amount of money

zi2lalZ 2021-01-31 Answered

Consider the exponential function f(x)=1,2501.08x which models the amount of money invested in a bond fund where x represents the number of years since the money was invested. a. What is the rate of growth or decay?
b. What does 1,250 represent?

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Expert Answer

coffentw
Answered 2021-02-01 Author has 103 answers
Solution:
f(x)=1250×(1.08)x (1)
where x represent the number of years.
The formula for exponential growth of a variable y at the growth rate r, as time x goes on indiscrete intervals (that is, at integer times 0,1,2,3,...), is yx=y0(1+r)x (2) where y0 is the value of y at time 0.
a) On comparing (1) and (2) we have
1.08=1+r
r=1.081
r=0.08=8100=8%
Therefore rate of growth =8% per year
b) 1250 represents the amount of money invested at time x=0
That is the initial amount invested in the bond fund.
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