Question

ART Martin bought a painting for $5000. It is expected to appreciate at a continuous rate on

4%. How much will the painting be worth in 6 years? Round to the nearest.

Answer 1

`\$6,326.60`

Explanation:

we know that

The equation of a exponential growth function is given by

`y=a(1+r)^x`

where

y is the value of the painting

x is the number of years

a is the initial value

r is the rate of change

we have

`a=\$5,000\\r=4\%=4/100=0.04`

substitute

`y=5,000(1+0.04)^x`

`y=5,000(1.04)^x`

How much will the painting be worth in 6 years?

For x=6 years

substitute the value of x in the equation

`y=5,000(1.04)^6=\$6,326.60` ----> rounded to the nearest hundredth