BUSINESS, FUR1 2002 VCAA 8 MC

The following graph represents the growth of an investment over several years.

If `A` dollars is the value of the investment after `n` years, then a rule for describing the growth of this investment could be

A. `A = 2000 xx (1.06)^n`

B. `A = 2000 xx (0.06)^n`

C. `A = 2000 xx 1.06n`

D. `A = 2000 xx 0.06n`

E. `A = 2000 + (1.06)^n`

Show Answers Only

`A`

Show Worked Solution

`text(As investment value increases each year,)`

`text(in the multiple choices given, as)\ n`

`text(increases,)\ A\ text(increases.)`

`:.\ text(Eliminate)\ B, D.`

`text(As line that can be drawn on graph is not)`

`text(linear,)\ C\ text(is wrong.)`

`:.\ text(Eliminate)\ C.`

`text(For each year that passes, the value that is)`

`text(increased is proportional to the value of the)`

`text(previous year.)`

`:.\ text(Eliminate)\ E.`

`=> A`