Question

An account grows at an annual interest rate of r, so it grow by a factor of x=1+r each year. The function gives the amount in the account after 4 years when the growth factor is x. What is the total amount in the account if the interest rate for the account is 3% each year?

Answer 1

Complete question :

An account grows at an annual interest rate of r , so it grows by a factor of x = 1+ r each year. The function A(x)= 800x^4 + 350x^3 + 500x^2 + 600x gives the amount in the account after 4 years when the growth factor is x.

1) What is the total amount in the account if the interest rate for the account is 3% each year?

Answer:

2,431.311498

Explanation:

Given that:

Growth factor (x) = (1 + r) per year

If rate (r) = 3% = 0.03

x = 1 + 0.03 = 1.03

Amount in account after 4 years is given by the function :

A(x)= 800x^4 + 350x^3 + 500x^2 + 600x

Put x = 1.03 to obtain the total amount ;

A(1.03) = 800(1.03)^4 + 350(1.03)^3 + 500(1.03)^2 + 600(1.03)

= 2431.311498

Hence, total amount in account after 4 years = 2,431.311498