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Marilyn collects old dolls. She purchases a doll for $450. Research shows the doll's value with increase by 2.5% each year.

Assuming the doll's rate of appreciation remains the same, what will be value of the doll in 20 years, to the nearest penny?

Respuesta :

calculista

Answer:

[tex]\$737.38[/tex]

Step-by-step explanation:

we know that

The equation of a exponential growth function is given by

[tex]y=a(1+r)^x[/tex]

where

y is the value of the doll

x is the number of years

a is the initial value

r is the rate of change

we have

[tex]a=\$450\\r=2.5\%=2.5/100=0.025[/tex]

substitute

[tex]y=450(1+0.025)^x[/tex]

[tex]y=450(1.025)^x[/tex]

What will be the value of the doll in 20 years?

For x=20 years

substitute in the equation

[tex]y=450(1.025)^{20}=\$737.38[/tex]

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