Answer:
y = 500(1.05)^x.
Step-by-step explanation:
551.25 = 500x^2 where x is the multiplier for each year.
x^2 = 551.25/500
x = 1.05
So the value after x years is 500(1.05)^x.
Answer: [tex]y=500(1.05)^x[/tex]
Step-by-step explanation:
The exponential growth equation is given by :-
[tex]y=A(1+r)^x[/tex] (1)
, where A is the initial value of , r is the rate of growth ( in decimal) and t is the time period ( in years).
Given : The value of a collector’s item is expected to increase exponentially each year.
The item is purchased for $500. After 2 years, the item is worth $551.25.
Put A= 500 ; t= 2 and y= 551.25 in (1), we get
[tex]551.25=500(1+r)^2\\\\\Rightarrow\ (1+r)^2=\dfrac{551.25}{500}\\\\\Rightarrow (1+r)^2=1.1025[/tex]
Taking square root on both sides , we get
[tex]1+r=\sqrt{1.1025}=1.05\\\\\Rightarrow\ r=1.05-1=0.5[/tex]
Now, put A= 500 and r= 0.5 in (1), we get the equation represents y, the value of the item after x years as :
[tex]y=500(1+0.5)^x\\\\\Rightarrow\ y=500(1.05)^x[/tex]
