Model Exponential Growth and Decay
Solve $t$ Years After 2000 Is Given by the Exponential Growth Model

question 101

Multiple Choice

Model Exponential Growth and Decay
Solve.
-The value of a particular investment follows a pattern of exponential growth. In the year 2000 , you invested money in a money market account. The value of your investment $t$ years after 2000 is given by the exponential growth model $\mathrm { A } = 3800 \mathrm { e } ^ { 0.062 \mathrm { t } }$ . When will the account be worth $\$ 6639$ ?

• A) 2009
• B) 2010
• C) 2011
• D) 2008

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Definitions:

Independent Projects

Projects that are evaluated for investment purposes, where the acceptance of one project does not affect the decision to undertake another.

IRR

A financial metric, the Internal Rate of Return, is applied to estimate the profitability prospects of potential investments.

AAR

Average Annual Return, representing the average amount of money earned by an investment each year over a given time period.

Discounted Payback

A capital budgeting method that calculates the time needed to recoup the initial investment in present value terms, considering the time value of money.