Question

Andrea invested $3,000 in an online currency. If the value of the currency increases at a rate of 14% per year, the situation can
be modeled using the equation A (t) = 3, 000(1.14)*, where A is the amount in the investment after t years. In 3
sentences, identify the key features of the graph and interpret the meaning of the data.

Answer 1

The graph is an increasing exponential curve with y-intercept A(0) = \$3,000 (the initial investment) and it passes through (1, \$3,420) since 3,000·1.14 = 3,420. The base 1.14 represents a 14% annual growth rate, so each year the investment is multiplied by 1.14 (A(t) = 3,000·(1.14)^t), giving A(2) = 3,000·(1.14)^2, etc. This means the investment grows steadily and, if the 14% rate continues, the amount increases without bound over time (e.g., larger values for larger t).