Question

Brenda is opening a savings account which compounds interest quarterly. Her banker gave her the following expression to

find the amount that will be in the account, in dollars, after tyears.
4,200(1.05)41
Which statement below best describes the base, 1.05?
OA.
the amount of the initial deposit
OB
the amount of the yearly earnings
OC. the rate at which the account is increasing
OD
the number of times the account has compounded since it was opened

Answer 1

The correct option is;

C. The rate at which the account is increasing

Explanation:

The given parameters are;

The rate at which the compound interest on the savings account is compounded = quarterly

The expression given by her banker to find the amount in the account after t years = 4,200(1.05)^(4t)

Therefore, the 1.05 = The rate at which the account is increasing