Suppose you have an investment offer that guarantees an average investment gain of $3,000 per year.
(a)What is the average rate of change (in dollars per year) of this investment?
(b)
If the value of the investment today is $10,000, what will be the value (in dollars) of the investment in 2 years?
(a) The average rate of change can be calculated by dividing the average investment gain of $3,000 by the number of years, which in this case is 1. Therefore, the average rate of change is $3,000 per year.
(b) If the value of the investment today is $10,000 and the average investment gain is $3,000 per year, then the value of the investment in 2 years can be calculated by adding the average investment gain to the initial value for each year.
After 1 year: $10,000 + $3,000 = $13,000
After 2 years: $13,000 + $3,000 = $16,000
Therefore, the value of the investment in 2 years will be $16,000.