Question

In the context of finance, what does the term represent in the function f(x)=500(1+0.02)ˣ, where x is the time in years?

a. Principal amount
b. Interest rate
c. Time
d. Accumulated amount

Answer 1

The term represented by the function f(x) = 500(1 + 0.02)^x is the accumulated amount where '500' is the principal, '0.02' is the interest rate, and 'x' is the time in years.

Step-by-step explanation:

In the given function f(x) = 500(1 + 0.02)^x, the term being represented is the accumulated amount after x years. This function models the growth of an initial principal amount when interest is compounded annually. Here, '500' represents the initial principal amount, '0.02' represents the interest rate (or 2%), and 'x' represents time in years. The entire expression calculates the total amount you would have after x years, including interest compounded annually.