Answer:
Average rate of change in dollars per year between years 15 to 20 is:
$5300 per year.
Step-by-step explanation:
Given that:
Initial Investment, P = $5000
Formula:
[tex]A(t) = P(1.06)t[/tex]
To find: If James invests $5000,
average rate of change in dollars per year (rounded to the nearest dollar) between years 15 and 20=?
Solution:
First of all, let us find out A(15) and A(20):
Putting t = 15 first,
[tex]A(15) = 5000(1.06)\times 15 ....... (1)[/tex]
Putting t = 20,
[tex]A(20) = 5000(1.06)\times 20 ....... (2)[/tex]
Average rate of change / year is defined as:
[tex]\dfrac{\text{Change in value of A}}{\text{Number of years}}[/tex]
So, required rate of change:
[tex]\dfrac{A(20)-A(15)}{5}\\\Rightarrow \dfrac{5000 \times 1.06 \times 20-5000 \times 1.06 \times 15}{5}\\\Rightarrow \dfrac{5000 \times 1.06 \times (20-15)}{5}\\\Rightarrow \dfrac{5000 \times 1.06 \times 5}{5}\\\Rightarrow 5000 \times 1.06\\\Rightarrow \$5300\ per \ year[/tex]
So, the answer is:
Average rate of change in dollars per year between years 15 to 20 is:
$5300 per year.
