Problem

The amount of money, $A(t)$, in a savings account that pays $6 \%$ interest, compounded quarterly for $t$ years, when an initial investment of $\$ 8100$ is made, is given by $A(t)=8100(1.015)^{4 t}$. Find $\frac{A(2)-A(1)}{2-1}$ Interpret the result Question Help: $\square$ Video Submit All Parts

Solution

Step 1 :Substitute \(t=1\) into the formula \(A(t)=8100(1.015)^{4 t}\) to get \(A(1)\)

Step 2 :Substitute \(t=2\) into the formula \(A(t)=8100(1.015)^{4 t}\) to get \(A(2)\)

Step 3 :Subtract \(A(1)\) from \(A(2)\) to get the difference

Step 4 :Divide the difference by the difference in time (which is 1 year) to get the rate of change

Step 5 :\(\boxed{527.55}\) is the rate of change of the amount of money in the account with respect to time, between the first and second year. This means that the amount of money in the account increased by about \$527.55 from the first year to the second year.

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Source: https://solvelyapp.com/problems/42918/

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