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50 PTS

The amount of money, in dollars, in a savings account after x years is given by M(x) = 10,000(1.03)x. What does the value 1.03 represent?
A) The original deposit was $103.
B) There is a 3 percent increase in the savings account each year.
C) The savings account earns $103 interest per month.
D) There is a 103 percent increase in the savings account each year.

User PsychoX
by
8.3k points

1 Answer

5 votes

Answer:

The correct option is B.

Explanation:

The amount of money, in dollars, in a savings account after x years is given by
M(x) = 10000(1.03)^(x)

This above equation represents that $10000 becomes M(x) after x years at a rate of interest 3% compounded in each year.

Therefore, the value in the expression 1.03 represents that there is a 3 percent increase in the savings account each year.

So, the correct option is B. (Answer)

User Qandeel Abbassi
by
8.3k points
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