Question

Victoria has some money from her birthday and the amount is modeled by the function h(x) = 200. She read about a bank that has savings accounts that accrue interest according to the function s(x) = (1.05)x − 1. Victoria is thinking about putting her money into the savings account to gain interest. Using complete sentences, explain to Victoria how she can combine her functions to create a new function, and explain what this new function means.

Answer 1

Interest gained for a particular period equals to Money invested (kept) in Savings account for that period multiplied by Interest accrued on this money.

Therefore, Accrued interest i(x) = h(x) * s(x) = 200 * [ (1.05)x - 1 ],
where x is the number of years for which money is invested.

So, new function i(x) = (210)x - 200 .