Answer:
The correct statement is D. The account balance will increase 4% each year.
Correct statement and question:
The equation A = 1750(1.04)^t represents an account balance t years after the account was created.
Which statement is correct?
A. The account balance will decrease 0.04% each year.
B. The account balance will increase 0.04% each year.
C. The account balance will decrease 4% each year.
D. The account balance will increase 4% each year.
Source:
Tennessee Comprehensive Assessment Program - Algebra I Practice Test
Explanation:
Let's recall that 1.04 is the result of adding:
1 + 0.04 and, we can also write 0.04 as 4/100 or 4%,
in consequence,
1.04 = 1 + 4%, where we're increasing an additional 4%.
The correct statement is D. The account balance will increase 4% each year.