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Given an exponential function for compounding interest, A(x) = P(0.77)^x , what is the rate of change as a percentage?

Given an exponential function for compounding interest, A(x) = P(0.77)^x , what is-example-1

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Solution:

An exponential function is expressed as


\begin{gathered} y=a(1+r)^x--\text{ equation 1} \\ where \\ r\Rightarrow rate\text{ of change} \end{gathered}

Given the exponential function:


A(x)=P(0.77)^x---\text{ equation 2}

By comparison, we have


\begin{gathered} 0.77=1+r \\ add\text{ -1 to both sides,} \\ 0.77-1=-1+1+r \\ \Rightarrow r=-0.23 \\ In\text{ percentage, we have} \\ r=-23\% \end{gathered}

Hence, the correct option is

Given an exponential function for compounding interest, A(x) = P(0.77)^x , what is-example-1
User Outis Nihil
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