Ian has a bank account that earns interest. The value, V, in dollars, of Ian's account after t years can be modeled by the exponential function V(t)=5000(1.025)t.

Question

Ian has a bank account that earns interest. The value, V, in dollars, of Ian's account after t years can be modeled by the exponential function V(t)=5000(1.025)t.

Ian claims that the value of his bank account grows by an equal factor each year. To prove his claim, which equation must he show to be true?

a) V(t+1) − V(t) =1.025

b) V(t+1) / V(t) =1.025

c) V(t) − V(t+1) =1.025

d) V(t) / V(t+1) =1.025

I'm not entirely sure what the answer is but I think it's either b or c

Answer 1

If the account grew by the same amount each year, the difference (that's subtraction!) between any two consecutive years would be the same.