Answer:
A) 1: linear; 2: exponential (see equations in part B)
B) the value of 2 will be almost 15% greater
Step-by-step explanation:
Part A:
As is often the case with multi-part questions, later parts of the question answer earlier parts. The equations shown in Part B are linear for Option 1 and exponential for Option 2.
The table values for Option 1 have a common difference of (1200 -1100) = 100.
The table values for Option 2 have a common ratio of (1210/1100) = 1.10.
Linear functions produce sequential values with a common difference (the slope of the function). Option 1 is linear.
Exponential functions produce sequential values with a common ratio (the growth factor). Option 2 is exponential.
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Part B:
The investment values after 7 years will be ...
Option 1: f(7) = 100(7) +1000 = 1700
Option 2: g(7) = 1000(1.1^7) ≈ 1948.72
The value of Option 2 will be about $248.72 higher, or 14.6% higher than the value of Option 1. Whether that is significant or not is in the eye of the beholder. Many people might consider that to be significantly better performance. (It would take another 2 1/2 years for Option 1 to have that value.)
