Respuesta :
Answer:
The value of the item after 4 years is $608
Step-by-step explanation:
In this question, we are tasked with calculating the value of an item which increases at a particular percentage after 4 years.
To calculate the new value, we will be needing an exponential model to get it
mathematically this can be represented as;
V = I(1 + r)^t
where V is the value after t years
I is the initial value which is $500 according to the question
r is the increase rate = 5% = 5/100 = 0.05
t is time which is 4 years
Plugging these values, we have
P = 500(1+0.05)^4
P = 500(1.05)^4
P = 607.75 which is approximately $608
