Question

The amount of money in a bank account with an initial balance of $15,000 earns 3% per year. In the exponential model of the form y=A•B^x. Which value would represent the value of b in the function ?

Answer 1

1.03=b this makes sense because it increases 3 percent so you add 1 to .03

Answer 2

The value of b in the function is 1.03.

Explanation:

A function that models exponential growth grows by a rate proportional to the amount present. For any real number x and any positive real numbers a and b such that
`b\\eq 1`, an exponential growth function has the form

`f(x)=ab^x`

where

• a is the initial or starting value of the function.
• b is the growth factor or growth multiplier per unit x.

We know that the amount of money in a bank account with an initial balance of $15,000 earns 3% per year. So each year we have all of the previous earnings plus 3% more of those earnings (100% + 3% more).

Therefore,

The value of b in the function is
`b=1+0.03=1.03`.