The value of a company, in millions of dollars, during its first 10 years increased by 2% each year. The original valuation of the company was 2.1 million dollars. Write a function to represent the value of the company x years after being founded. How much more was the company worth, in millions of dollars, after 6 years than after 2 years? Explain how you solved this problem.

Question

markchernioglo · Answer

@AloneS one more! :D

markchernioglo · Answer

@Awolflover1

danjs · Answer

This is a exponential function, each year you are adding 2% of the total value at the end of that year, so the total adds up and so does the 2% increase over time.

markchernioglo · Answer

Huh I see...

Just not sure how to put it into equation. :/

danjs · Answer

after one year
Value = (Original Value) + (original Value)*0.02
V = 2.1 + 2.1 *0.02 = 2.1 *(1 + .02)
V = 2.1 *(1.02)

After 2 years, you take another 2%, multiply again
V = 2.1 *(1.02)*(1.02)

Each year you add another multimple of 0.02, the overall is

$$\large V = 2.1*(1.02)^x$$

markchernioglo · Answer

Ooooh man I see it now! Haha

danjs · Answer

It is the exponential form

y = A*b^x

markchernioglo · Answer

Yup, thanks Dan, I really appreciat it. :)

danjs · Answer

welcome