Advanced MathVery hardInterpreting an exponential model's parameters
Advanced Math practice question
The value V, in dollars, of a collectible t years after 2020 is modelled by V(t) = 150(1.08)ᵗ. Which statement is the best interpretation of the number 1.08?
- A. The value increases by 8% each year.Correct
- B. The value increases by $1.08 each year.
- C. The value was $1.08 in 2020.
- D. The value increases by 108% each year.
Answer: A. The value increases by 8% each year.
Multiplying by 1.08 each year is a yearly increase of 8%.
Why the other answers are wrong
- B. The value increases by $1.08 each year.
- 1.08 is a factor, not a dollar amount.
- C. The value was $1.08 in 2020.
- The 2020 value is 150.
- D. The value increases by 108% each year.
- An increase of 108% would be a factor of 2.08.
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