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?
4,200(1.05)*
4,410(1.05)*
4,410(0.05t)
4,200(0.05)*
If the value of Tim's shares continues to increase at the same rate, what will they be worth 20 years after he bought them?
Round your answer to the nearest whole number.
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The correct expression that best models the value of Tim's shares over time is 4,200(1.05)t. This is an exponential growth model where the initial value of $4,200 is multiplied by 1.05 (representing a 5% increase) to the power of t (number of years).
To find out what Tim's shares will be worth 20 years after he bought them, we substitute t = 20 into the expression:
4,200(1.05)^20 ≈ $11,366.56
Rounded to the nearest whole number, Tim's shares will be worth approximately $11,367.
Wrong answer.
I apologize for the incorrect answer. Let's try again.
The correct expression that best models the value of Tim's shares over time is 4,200(1.05)t. This is an exponential growth model where the initial value of $4,200 is multiplied by 1.05 (representing a 5% increase) to the power of t (number of years).
To find out what Tim's shares will be worth 20 years after he bought them, we substitute t = 20 into the expression:
4,200(1.05)^20 ≈ $10,776.91
Rounded to the nearest whole number, Tim's shares will be worth approximately $10,777.