exponential function
posted by Jus .
An investment pays 8% interest, compounded annually.
a) write an equation that expresses the amount, A, of the investment as a function of time, t, in years.
b) determine how long it will take for this investment to double in value and then to triple in value.
c) determine the percent increase in value of the account after 5 years and then after 10 years.
d) explain why the answers to parts b and c do not depend on the amount of the initial principal.
Can someone explain to me how to get started? I do not know where to start except for the fact that I need to make an exponential function.

after one year
A = Ao (1.08)
after two years
A = Ao (1.08)(1.08)
after three years
A = Ao (1.08)(1.08)(1.08)
after t years
A = Ao (1.08)^t
When is A/Ao = 2?
2 = 1.08^t
log 2 = t log 1.08
.301 = t * .0334
t = 9.01 years to double
That should get you started. 
did i do part c right?
c) determine the percent increase in value of the account after:
5 years,
A=(1.08)^5
=1.47
therefore 1.47 % increase??? 
c) continued:
after 10 years
A=(1.08)^10
=2.16
therefore 2.16% increase?
Am I doing this right?
d) Explain why the answers to parts b and c do not depend on the amount of the initial principal. 
" =1.47
therefore 1.47 % increase??? "
A factor of 1.47 is a 47% increase
100 * final/original = 147/1 =147 %
which is 47 % over the original 100% 
2.16 * 100 = 216 % of original
216 %  original 100% = 116% increase
Respond to this Question
Similar Questions

Algebra
Greta invests $10,000 in an investment that pays 3% interest, compounded annually, for the first three years, then 9% interest, compounded annually, for the last three years. Rui invests $10,000 in an investment that pays r% for all … 
Exponential Word Problem
An investment pays 3.5 percent interest, compounded quarterly. a) write an equation to express the amount A, of the investment as a function of time, t, in years. The answer is A(t)=P(1.00875)^4t Ok, but my question is this: Why isn't … 
advanced functions
An investment pays 8% interest, compounded annualy. Write an ewuatiin that expressed the amount A, of the investment as a function of time, t, in years 
Maths B
Kate is thinking about investing $45000 for 5 years. She deposits her money into an account which earns interest paid quarterly at a rate of 3.99% p.a. After 1½ years, Kate withdraws her investment (including interest) and deposits … 
precalc
A $5000 investment earns 7.2% annual interest, and an $8000 investment earns 5.4%, both compounded annually. How long will it take for the smaller investment to catch up to the larger one? 
Investment interest
Scenario: A client comes to you for investment advice on his $500,000 winnings from the lottery. He has been offered the following options by three different financial institutions and requests assistance to help understand which option … 
Financial Math
An investment of $2500 accumulates at 6% p.a compounded semi annually for 3 years. At that time, the interest rate is changed to 5% compounded monthly. How much is the investment worth 2 years after the change in interest rate? 
Math
A Registered Education Savings Plan (RESP) earns interest at a rate of 5% per year, compounded annually. Jasmine’s parents invest $4000 in the account today. a) Determine an explicit formula to represent the value of the investment. … 
Algebra I
5. Holly wants to invest $1000. The table below shows the value of her investment under two different options for two different years: Part A: What type of function, linear or exponential, can be used to describe the value of the investment … 
math
simplify (8*10^7)(7*10^4) i think it's 5.6*10^10 simplify (3*10^6)(8*10^4) i think it's 2.4*10^3 Astronomers measure large distances in lightyears. One lightyear 5.88*10^12 mi Star is 9.8*10^1 light years from Earth in scientific …