i need help

The value of a collector’s item is expected to increase exponentially each year. The item is purchased for $500 and its value increases at a rate of 5% per year. Find the value of the item after 4 years.

$578.81
$607.75
$1687.50
$2531.25

Question

i need help

The value of a collector’s item is expected to increase exponentially each year. The item is purchased for $500 and its value increases at a rate of 5% per year. Find the value of the item after 4 years.

$578.81
$607.75
$1687.50
$2531.25

supie · Answer

I think what you have to do is $$500 × 1.21550625 = ?$$

Lisaneedham · Answer

thanks

supie · Answer

np

jimthompson5910 · Answer

Agreed. You would do
$y = P*(1+r)^x$
$y = 500*(1+0.05)^4$
$y = 500*(1.05)^4$
$y = 500*1.21550625$
$y = ??$
Where P = 500 is the initial value, r = 0.05 is the growth rate, and x = 4 is the number of years.