Question

You have a savings account that offers an annual simple interest rate of 7%. You put $400 into the account. Select the graph showing the total interest you earn after 1, 2, 3, and 4 years.

Answer 1

Line: I(x)= 28x+400

Explanation:

Initial amount= $400

Interest rate= 7% simple

Total interest:

• Year 1= $400+7%= 400+ 400*0.07= 400+28= 428
• Year 2= $400+2*7%= 400+400*0.07*2= 400+56= 456
• Year 3= $400+7%*3= 400+400*0.07*3= 400+84= 484
• Year 4= $400+7%*4= 400+400*0.7*4= 400+112= 512

The graph for this function will be a line with equation:

I(x)= 400+400*0.07x= 28x+400, where I- interest, x- year