Future Value of an Investment If $1000 is invested at 6% simple interest, the initial value and the future value S at the end of each of 5 years are shown in the table that follows.
a. Can a linear function model exactly the points from the table? Explain.
b. If so, find a linear function S = f (t) that models the points.
c. Use the model to find the future value of this investment at the end of the 7th year. Is this an interpolation or an extrapolation from the data?
d. Should this model be interpreted discretely or continuously?
Year (t) | 0 | 1 | 2 | 3 | 4 | 5 |
Future Value (S) | 1000 | 1060 | 1120 | 1180 | 1240 | 1300 |
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