Answer:
1.03
Step-by-step explanation:
We have been given that an investment of $25,000 grows in value at a rate of 3% per year. We are asked to find the growth factor for the given investment.
We will use exponential growth function to solve our given problem.
\(y=a\cdot b^x\), where,
a = Initial value,
b = For growth factor b is in form (1+r), where, r represents rate in decimal form.
Let is convert our given rate in decimal form.
\(3\%=\frac{3}{100}=0.03\)
Upon substituting our given values in exponential growth formula, we will get
\(y=\$25,000(1+0.03)^x\)
\(y=\$25,000(1.03)^x\)
Therefore, the growth factor of our given investment is 1.03.
