I can’t figure this out! Please help. Medal to best answer.
As a newborn in 1949, Hal’s grandparents gave him a gift of $1000 in a savings account with a simple interest rate of 4% per year. As Hal aged, his gift grew and he withdrew the money so he could transfer it to his sons. The growth of his account can be modeled by the equation y = 1000(1.04)^x where y is the value of the account and x is the number of years. Which of the following dollar amounts is reasonable given the bounds of the parameter?
$50,000
$359,000
$135,000
$2,550,000
There is no limit to the value of the account.

Question

kropot72 · Answer

The maximum possible value of the account can be found by assuming that the money was withdrawn from the account this year. In that case the number of years would be given by:
2014 - 1949 = 65
The value of the account would then be 
$$\large y=1000(1.04)^{65}$$
Now you need to calculate this value and see whether it is close to any of the answer choices.

beccab003 · Answer

Okay, Thank you. I know how to do problems like these but the only ones that I have been given have been ones where they tell you the x variable. I did the equation that you gave me and it is: 12798.73522. So that means it would be either A or C, I think.

beccab003 · Answer

12798.73522 does mean: $12,798.74 right?

beccab003 · Answer

@kropot72

kropot72 · Answer

So, you have found that the maximum possible value of the account is $12,798.74. Is that value close to any of the answer choices?

beccab003 · Answer

It is closest to answer option a.

kropot72 · Answer

But the value of $50,000 is nearly four times the maximum possible value of the account, therefore I believe that it is not a "reasonable" amount. Also none of the other choices are reasonable.

beccab003 · Answer

Yeah that is true. It must be one of the answers though. How could that be?

kropot72 · Answer

I think that there is probably a mistake either in the question or in the answer choices.
Can you take up the problem with your instructor?

beccab003 · Answer

I will see if I can, yes.

beccab003 · Answer

There is one more question that I have already found the answer to but I was wondering if you would be so kind as to see if I got the answer correct?

kropot72 · Answer

Another point with the question is the statement "....with a simple interest rate of 4% per year", which indicates that the account was of the simple interest type. However the given formula is for interest compounded yearly. Perhaps you can take this up also.

kropot72 · Answer

Please post the other question as a new one.

beccab003 · Answer

Alright, I will.

beccab003 · Answer

Would you mind checking a problem I have already done just to see if it was correct?