(2 points) The value of a stock increases by 1% every year. At the beginning of
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(2 points) The value of a stock increases by 1% every year. At the beginning of February 1st, 2019 it is valued at 70 dollars per share. (a) Write a formula for the value of the stock (in dollars) as a function of time, t, in years after the beginning of February 1st, 2019. V = (b) What is the value of the stock at the beginning of February 1st, 2027? Value: dollars (c) How quickly is the value of the stock increasing at the beginning of February 1st, 2027? dollars per year Rate: (d) What is the continuous growth rate of V? Rate: % per year (e) What is the percentage rate of change in the value of the stock at the beginning of February 1st, 2027? Percentage rate: % per year (Compare this to your answer in part (d). Remember that this characteristic is the defining one for an exponential function, and it is why we care about the continuous growth rate in particular.Explanation / Answer
a) As the stock increases by 1% every year
V = 70(1 + 1/100)t
V= 70*1.01t
b) value of stock at 2027 is 75.799 = 75.8
c)0.725 dollars per year
d)growth rate is 1%
e)8.28% per year
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