Question

Given an exponential function for compounding interest, A(x) = P(.91)^x, what is the rate of change?

Answer 1

Answer:

Option B = -9%

Step-by-step explanation:

Given : Given an exponential function for compounding interest, $A(x) = P(.91)^x$

To find : What is the rate of change?  

Solution :

The general form of the exponential function is $f(x)=a(1+r)^x$

Where,

r is the rate of change

if r> 1 then it is growth rate    

if r< 1 then it is decay rate.

Comparing given function with exponential function,

$A(x) = P(.91)^x$

$1+r=0.91$

$r=0.91-1$

$r=−0.09$

It is a decay rate.

Convert into percentage, multiply with 100

$-0.09\times 100=-9\%$

Therefore, Option B is correct.

The rate of change is -9%.      

Answer 2

The confirmed correct answer is -9%. Trust me.