Question

At the beginning of year 1, Judy

deposits $250 in her savings
account, which pays 7% interest
compounded annually. She makes
no other deposits or withdrawals.
The amount in the account at the
beginning of each year is shown in
the table. Which function represents A(n), the amount in Judy’s account at the beginning of the year n?

Answer 1

The answer is D

Explanation:

Compound interest is interest with last years or last payment/period.

So if you have $1,000 in a bank as compound interest and you get 10% each year or $100, then next year you would get 10% of $1,100. That is compound interest.

The reason why it is D is because on the the deposit year did not count. So this means that you have to subtract 1 on the n years.