Question

Given an exponential function for compounding interest, A(x) = P(.95)x, what is the rate of change?

Answer 1

The answer should be -5% I hope this helped

Answer 2

Answer:

Option 3

The rate of change is -5%                

Step-by-step explanation:

Given : An exponential function for compounding interest, $A(x) = P(.95)^x$

To find : What is the rate of change?

Solution :

The general form of an exponential function is:

$f(x) = a(1+r)^x$

Where, a is the initial amount,

(1+r) is the rate of change,

r is the growth or decay factor

We have given, $A(x) = P(.95)^x$

Rate of change is

$1+r=0.95$

$r=0.95-1$

$r=-0.05$

Convert to percent,

$r=-0.05\times 100=-5\%$

Therefore, Option 3 is correct.