Question

The value of a rare painting has increased each year since it was found at a garage sale. The value of the painting is modeled by the function f(x) = 799(1.03)x. What does the 799 represent? What will the painting be worth after 5 years? Round your answer to the nearest dollar.

Answer 1

Value of the painting f(x) = 799(1.03)x (Given)

Time = t=5 (Given)

According to the concept of simple interest -

A = P (1+r)~t

where P is the present amount or principal,  t is the time, r is the rate  and A is the final amount which representes the original cost  

After 5 years

Therefore,  

A =799(1.03)^5

A=926.26

Thus, the painting after five years will be worth $926.2