Chapter 7.7, Problem 34PPE

To determine

To calculate: Function model of growth of investment.

Answer to Problem 34PPE

The function is $y=100{(1.08)}^x$ the amount will double in 9 years.

Explanation of Solution

Given information: 

Starting investment is 100$

Growth rate 8%

Formula used: 

Exponential factor:

  $y=a\cdot b^x$

b=growth factor

a=initial amount

x=number years

y=amount in year

Calculation:

As the initial is $100 and growth factor is $1+0.08=1.08$

The equation is:

  $\begin{array}{l}y=a\cdot b^x\\ $ y=100{(1.08)}^x$\end{array}$

x	y
0	100
1	108
2	116.64
3	125.97
4	136.04
5	146.93
6	158.68
7	171.38
8	184.08
9	199.90
10	215.89

As by the table the amount will double in 9 years

  

By the graph it is difficult to tell.