Tim owns shares in a mutual fund. His investment was worth $4,200 when he first bought the shares. One year later, his shares were worth $4,410.

Question

Tim owns shares in a mutual fund. His investment was worth $4,200 when he first bought the shares. One year later, his shares were worth $4,410.

Let t represent the number of years since Tim first bought the shares. Assuming the value has increased exponentially, which expression best models the value of Tim's shares over time?

Answer 1

Tim owns shares in a mutual fund. His investment was worth $4,200 when he first bought the shares. One year later, his shares were worth $4,410.

The expression that best models the value of Tim's shares over time is $4200 \times (1 + r)^t$, where $r$ represents the growth rate per year.