SOLUTION: As a newborn in 1928, Rose's Grandparents gave her a gift of $1000 in a savings account with a simple interest rate of 6% per year. As Rose aged, her gift grew and she withdrew th

Question 858177: As a newborn in 1928, Rose's Grandparents gave her a gift of $1000 in a savings account with a simple interest rate of 6% per year. As Rose aged, her gift grew and she withdrew the money so she could transfer it to her sister. The growth of this account can be modeled by the equation y=1000(1.06)*x where y is the value of the account and x is the number of years. Which of the following dollar amounts is reasonable given the bounds of the parameter?
A) $3,490,000
B)$206,173,000
C) $59,000
D) $6,250,000
E) There is no limit to the value of the account
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
As a newborn in 1928, Rose's Grandparents gave her a gift of $1000 in a savings account with a simple interest rate of 6% per year. As Rose aged, her gift grew and she withdrew the money so she could transfer it to her sister. The growth of this account can be modeled by the equation y=1000(1.06)*x where y is the value of the account and x is the number of years. Which of the following dollar amounts is reasonable given the bounds of the parameter?
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Assuming the transfer was made when Rose was 75,
A(75) = 1000(1+0.06*75) = 1000*5.5 = $5,500.00
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Cheers,
Stan H.
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A) $3,490,000
B)$206,173,000
C) $59,000
D) $6,250,000
E) There is no limit to the value of the account

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