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15 May, 10:01

The initial value of a stock is $2500. The value of the stock is expected to grow at an annual rate of 4%. Let x represent the number of years since the stock was made available for purchase. Let y represent the value of the stock x years later. What equation models the value of the stock x years after it was made available?

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  1. 15 May, 12:02
    0
    y = ($2500) (1.04) ^x

    Step-by-step explanation:

    The initial value = $2500

    The value of the stock is expected to grow at the rate of 4%

    Let x represent the number of years since the stock was made available for purchase.

    Let y represent the value of the stock x years later.

    y1 = amount of money after one year.

    y1 = $2500 (100% + 4%)

    y1 = $2500 (104%)

    y1 = $2500 (1.04)

    y2 = amount of money after two years

    y2 = y1 (100% + 4%)

    y2 = y1 (104%)

    y2 = y1 (1.04)

    y2 = $2500 (1.04) (1.04)

    y2 = $2500 (1.04) ^2

    This will give a pattern

    y5 = $2500 (1.04) ^5

    After x years the model of the equation will be y = ($2500) (1.04) ^x
  2. 15 May, 13:38
    0
    Step-by-step explanation:

    Initial value of the stock is $2500 This means that the principal is

    P = 2500

    The value of the stock is expected to grow at an annual rate. This means that it grew once in a year. So

    n = 1

    The rate at which the stock grew is 4%. So

    r = 4/100 = 0.04

    x represent the number of years since the stock was made available for purchase ... So

    t = x

    The formula for determining the value of the stock x years later would be

    A = P (1+r/n) ^nt

    A = total value of the stock x years later. Let y represent the value of the stock x years later. Therefore,

    y = 2500 (1+0.04/1) ^1*x

    y = 2500 (1.04) ^x
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