Question

Suppose a long term investment is modeled by the exponential function V(t) = 30(25)t/20 where V(x) is the total value after t year. What does 25 represent in equation?

a. The interest rate
b. The growth factor
c. The initial deposit
d. The number of years

Answer 1

Option: b is the correct answer.

b. The growth factor

Explanation:

We are given a expression that represents the investment made.

The long term investment is modeled by the exponential function:

`V(t) = 30(25)^{(t)/(20)}`

where,

V(t) is the total value after t year.

The constant '25' here represents the growth factor by which our value is increasing each year.

constant '30' represents the initial value i.e. the investment made.

Hence, option: b is the correct answer.

b. The growth factor

Answer 2

The equation,
V(t) = 30(25)^(t/20)
The initial deposit is equal to 30, 25 represents the growth factor, and t is the number of years. Thus, for this item, the answer should be letter B.