Find formula for expo fcn for investment: $9750 initially, growing by 2.25% ann.

[jheartsn]

The value V of an investment in year t if the investment is initially worth $9750 and if it grows by 2.25% each year.

 

[Deleted member 4993]

The value V of an investment in year t if the investment is initially worth $9750 and if it grows by 2.25% each year.

Do you know the compound interest formula or Future Value formula?

What are your thoughts?

Please share your work with us ...even if you know it is wrong.

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[stapel]

The value V of an investment in year t if the investment is initially worth $9750 and if it grows by 2.25% each year.

They gave you a compound-interest formula, which you were probably instructed to memorize. You plugged the given information into the given formula, and... then what?

Please be complete. Thank you!

 

[HallsofIvy]

You are told that V(0)= 9750. Since the value "grows by 2.25% each year", the next year, when t= 1, the value is V plus 2.25% of V: V(1)= 9750+ 9750(0.025)= 9750(1.025). The next year, when t= 2, it will be that V(1) plus 2.25% of V(1): V(2)= (9750)(1.025)+ (9750)(1.025)(0.025)= (9750)(1.025)(1.025)= (9750)(1.025)^2. The next year, when t= 3, V(3)= (9750)(1.025)^2+ (9750)(1.025)^2(0.025)= (9750)(1.025)^2(1.025)= (9750)(1.025)^3.

Can you make a guess as to what V(n) is?

 

[stapel]

The value V of an investment in year t if the investment is initially worth $9750 and if it grows by 2.25% each year.

They gave you the compound-interest formula, probably looking something like this:

. . . . .A\, =\, P\,\left(1\, +\, \dfrac{r}{n}\right)^{nt}[/tex]

You plugged the given values into the given formula, simplified to get the ending value, and... then what?

Please be complete. Thank you!