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Each year, the value of an investment increases by0.49% of its value the previous year. Which of thefollowing functions best models how the value of theinvestment changes over time?A) Decreasing exponentialB) Decreasing linearC) Increasing exponentialD) Increasing linea

Question

Each year, the value of an investment increases by0.49% of its value the previous year. Which of thefollowing functions best models how the value of theinvestment changes over time?A) Decreasing exponentialB) Decreasing linearC) Increasing exponentialD) Increasing linea

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Solution

The best model for this type of growth is C) Increasing exponential. This is because the value of the investment increases by a certain percentage each year, which is a characteristic of exponential growth. In contrast, linear growth would involve the value increasing by a fixed amount each year.

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