Thinking Mathematically (6th Edition)

Published by Pearson
ISBN 10: 0321867327
ISBN 13: 978-0-32186-732-2

Chapter 8 - Personal Finance - 8.3 Simple Interest - Exercise Set 8.3: 45

Answer

(a) $A = 275~t+ 5000$ (b) The slope of the function is 275. The rate of change of the value in the account is $\$275$ per year.

Work Step by Step

(a) This is the formula we use when we make calculations with simple interest: $A = P~(1+rt)$ $A$ is the future value $P$ is the principal $r$ is the interest rate $t$ is the number of years We can express the future value in the account as a linear function of time, $t$. $A = P~(1+rt)$ $A = (5000)~[1+(0.055)t]$ $A = 275~t+5000$ (b) The future value in the account is $A = 275~t+5000$ The slope of the function is 275. This means that the account increases in value by $\$275$ per year. That is, the rate of change of the value in the account is $\$275$ per year.
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