Question

Sarah invests her graduation money of $1.750 in an annuity that pays an

interest rate of 6% compounded annually. Write an exponential function
that describes her investment growth."
f(1) = 1, 750(1.06)
f(0) = 1,750(1.6)*
O
Option 1
O
Option 2
f() = 1, 750(.94)"
f(x) = 1, 7500.06)"
O
Option 3
O
Option 4

Answer 1

We have been given that Sarah invests her graduation money of $1,750 in an annuity that pays an interest rate of 6% compounded annually. We are asked to write an exponential function for her investment growth.

We will use compound interest formula to solve our given problem.

`A=P(1+(r)/(n))^(nt)`, where

A = Final amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

`6\%=(6)/(100)=0.06`

Since interest is compounded annually, so
`n=1`.

`f(t)=1750(1+(0.06)/(1))^(1\cdot t)`

`f(t)=1750(1+0.06)^( t)`

`f(t)=1750(1.06)^( t)`

Therefore, the function
`f(t)=1750(1.06)^( t)` describes Sarah's investment growth.