Question

A bank account with an initial deposit of $4,000 and an interest rate of 4% increases by 4% each year. The balance (B) as a function of time in years (t) can be described by an exponential function: B(t) = 4,000(1.04)t
What parameter would change if the interest rate were changed to 7%?

Parameter
(select)
would change if the interest rate were changed to 7%.

Answer 1

R=R/100=4/100=0.04 per year. Solving equation A=P(1+rt ). A=4000(1+0.04)=4160. A=$4160