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29 November, 09:22

Gerardo has just invested in a bond worth $470 that is expected to increase in value by 6% per year. Write the equation used to determine the value of his bond after t years.

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  1. 29 November, 10:54
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    Step-by-step explanation:

    We would apply the formula for determining compound interest which is expressed as

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

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $470

    r = 6% = 6/100 = 0.06

    n = 1 because it was compounded once in a year.

    Therefore, the equation used to determine the value of his bond after t years is

    A = 470 (1 + 0.06/1) ^1 * t

    A = 470 (1.06) ^t
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