Question

The average annual salary of the employees of a company in the year 2005 was ninety thousand dollars. It increased by the same factor each year and in 2006, the average annual salary was $91,200. Let f(x) represent the average annual salary, in thousand dollars, after x years since 2005. Which of the following best represents the relationship between x and f(x)?

f(x) = 91.2(1.013)x
f(x) = 90(1.013)x
f(x) = 91.2(2.2)x
f(x) = 90(2.2)x

Answer 1

Given:
year 0 - 2005 : 90,000
year 1 - 2006 : 91,200

91,200 - 90,000 = 1,200
1,200 / 90,000 = 0.013

90,000 (1+0.013)^1 ⇒ 90,000 (1.013)^1 = 91,170 OR 91,200

The best representation of the relationship between x and f(x) is choice 2.
f(x) = 90(1.013)x