The Graph of a Function
The formula:
[tex]S=P(1+r)^t[/tex]
Will be used to calculating the future value of two conditions a and b
a) P = $60,000, r = 5% = 0.05, 0 ≤ t ≤ 12.
Substitute some selected values of t in the given interval.
For t=0:
[tex]\begin{gathered} S=60,000(1+0.05)^0 \\ S=60,000\cdot1.05^0 \\ S=60,000 \end{gathered}[/tex]
For t=3:
[tex]\begin{gathered} S=60,000(1+0.05)^3 \\ S=60,000\cdot1.05^3 \\ S=69,457.50 \end{gathered}[/tex]
For t=6:
[tex]\begin{gathered} \\ S=60,000\cdot1.05^6 \\ S=80,405.74 \end{gathered}[/tex]
For t=9:
[tex]\begin{gathered} S=60,000\cdot1.05^9 \\ S=93,079.69 \end{gathered}[/tex]
For t=12:
[tex]\begin{gathered} S=60,000\cdot1.05^{12} \\ S=107,751.38 \end{gathered}[/tex]
The graph that looks closer to the graph above is B.
b. Calculate the future value for t=5 years.
[tex]\begin{gathered} S=60,000\cdot1.05^5 \\ S=76,576.89 \end{gathered}[/tex]
