Question

The table shows the balance of an Investment account at the beginning of each year the account was held. Assuming that no other deposits
have been made to the account, which statement describes the account's growth?
Year
Account
Balance
$200.00
$208.00
$216.32
A.
The account is growing linearly at an annual interest rate of 4.0096.
B.
The account is growing exponentially at an annual Interest rate of 4.00%.
OC.
The account is growing linearly at an annual interest rate of 8.16%.
D.
The account is growing exponentially at an annual Interest rate of 8.16%.​

Answer 1

Answer:

B.

The account is growing exponentially at an annual Interest rate of 4.00%.

Explanation:

Exponential growth is a fast or an accelerated growth rate. The quantity increasing or population size increases over time. The size of an investment grows by a bigger margin every period. If x is the size of growth at the end of every period, then the size of x increases every year.

In this scenario, the growth rate of $200.00, $208.00, and $216.32, meaning the growth rate is $8.00 and $8.32.  the growth rate = 8/200 x 100 = 4% and $8.32/208 x 208= $4%. The growth rate is at an increasing rate.

Linear growth is slow and steady growth. It represents a constant growth rate despite the size of the investment. If x is the growth rate, then the size x  remains constant throughout the life of an investment.