Leni buys shares of stock in Company Q at a total cost of $5,000. The stock is doing well and is increasing at a rate of 8% per week. What is the basic function you would use to figure out the value of the stock as time passes?(1 point)

Question

Responses

A=5,000(1−8%)t

A=5,000(8%)r
A=5,000(1.08)t

A=P(1+r)t

Answer 1

The basic function you would use to figure out the value of the stock as time passes is:

A = 5,000(1.08)^t

This reflects the initial investment of $5,000 growing at an 8% increase per week.

Another valid response that represents the same concept is:

A = P(1 + r)^t, where P is the principal amount ($5,000), r is the rate of increase (0.08), and t is time in weeks. In this case, it can be plugged in as A = 5,000(1 + 0.08)^t, which simplifies to A = 5,000(1.08)^t.

So both A = 5,000(1.08)^t and A = P(1 + r)^t are correct representations of the situation.