Question

Belinda wants to invest in an option that would help to increase your investment value by the greatest amount in 20 years. Will there be any significant can difference in the value of Belinda‘s investment after 20 years if she uses option two over option one? Explain your answer, and show the investment value after 20 years for each option.

Answer 1

Explanation:

Part A, Option 1 is a exponential function while option is a linear equation.

Part B, Let y=b*a^(x) be the function for option 1. At x=1, y=1100 and at x=2, y=1210. 1100=b*a and 1210=b*a^2. Dividing them both we get, b=1.1 and a=1000. y=1000*(1.1)^(x). For option 2, it's a linear equation with a function y(x)=1000+100x.

The 20 year difference would be immense. With option 1, Belinda will get $6727.5 whereas with option 2, they will end up with $3000