Question

Which function models the value in x years of an investment at 3% annual interest compounded quarterly?

Answer 1

Answer:

Option C is the correct answer.

Step-by-step explanation:

Looking at the functions given,

Initial amount deposited into the account is $150 This means that the principal is

P = 150

It was compounded quarterly. This means that it was compounded 4 times in a year. So

n = 4

The rate at which the principal was compounded is 3%. So

r = 3/100 = 0.03

It was compounded for x years. So

t = x years

The formula for compound interest is

A = P(1+r/n)^nt

A = total amount in the account at the end of t years. Therefore, the

function that models the value in x years of an investment at 3% annual interest compounded quarterly would be

150 (1+0.03/4)^4×x

150 (1 +.0075)^4x