Question

The value of savings account can be modeled by the function S(x) = 5, 000 * (1.025) ^ (0.7x) x is the number of years 1980. What is the approximate growth rate of the savings account?

Answer 1

The approximate growth rate of the savings account is 2.5%

Explanation:

Given the the function S(x) = 5, 000 * (1.025) ^ (0.7x)

From the function, we can see that part: (1.025). It presents for the growth factor or rate with the formula as:

(1 + r) where r is rate

So we have:

(1 + r) = 1.025

<=> r = 1.025 -1

<=> r = 0.025

In pecentage, we have the rare: 0.025 *100% = 2.5%

So the approximate growth rate of the savings account is 2.5%