Question

The function below represents the interest Kristina earns on an investment. Identify the term that represents the amount of money originally invested. f(x) = 5,000(1 + 0.04)x

Answer 1

The amount of money originally invested which is the principal P = 5,000

Explanation:

Using the compound interest formula, the return on investment can be represented on the interest function as;

f(x) = P(1+r)^x

Where

P is the principal which is the initial investment.

r = rate Proportion

x = time (number of years)

Comparing to the given function;

f(x) = 5,000(1 + 0.04)^x

We can see that;

Principal P = 5,000

Rate r = 0.04

time = x

The amount of money originally invested which is the principal P = 5,000