Question

Fedora invests $100. For the first year, the rate is 3%. The next year, the interest rate goes up to 4%. Which expression describes her investment after two years? A.

Answer 1

Explanation:

Assuming this is a simple interest.

• The interest amount for year 1 : 100*0.03 = 3

• The interest amount for year 2: 100*0.04 = 4

So, after two year, the rate wont change, then we have the expression:

Investment = (4+3) +100(1+0.04n) = 100(1+0.04n) + 7

(when n is year)