Question

A parent deposits $2000 into their child's bank account. The account earns 4%

interest each year. Write an explicit function that represents the situation. *
A(t) = 2000(1.04)-1
A (t) = 2000(4)'
A(t) = 2000(1.04)'
A(t) = 2000 + 4t
O

Answer 1

A = 2000(1.04)^t

Explanation:

Using the compound interest formula;

A = P(1+r)^t

P is the principal = $2000

r is the rate = 4% = 0.04

On substituting

A = 2000(1+0.04)^t

A = 2000(1.04)^t

Hence the required expression is A = 2000(1.04)^t