Cressida decided to save a part of her income in a savings account that compounds interest every four months. Her account balanc
e after t years can be given by the following expression. 3,545(1.045)^3t
What does the value 3 in the exponent represent?
the growth factor that reveals the rate at which the account balance increases
the amount saved each year
the number of times the account compounds interest
the initial amount invested
The answer is "<span>the number of times the account compounds interest</span>". The general formula is the following: wherein r is the interest rate compound each four months. Since there is 3*4 months in a year, then each year we compute the interest Three time, there where the factor 3 comes.
Cressida decided to save a part of her income in a savings account that compounds interest every four months. Her account balance after t years can be given by the following expression.
