Question

1.) Some banks charge a fee on savings accounts that are left inactive for an extended period of time. The equation y = 5000 * (0.98) ^ x represents the value, y of one account that was left inactive for a period of x years .
a. What was the initial amount of money that was left in this savings account?

b. What is the percent of change each year in this savings account?

Answer 1

Answer:

a. The initial amount of money that was left in this savings account was of 5000.

b. Decrease of 2% each year.

Step-by-step explanation:

Exponential function:

An exponential function, with an initial value of A(0), and a decay rate of r, as a decimal, is given by:

$A(t) = A(0)(1-r)^t$

In this question, we have:

$y = 5000*(0.98)^x$

a. What was the initial amount of money that was left in this savings account?

This is y(0) = 5000

The initial amount of money that was left in this savings account was of 5000.

b. What is the percent of change each year in this savings account?

First as a decimal.

1 - r = 0.98

r = 1 - 0.98

r = 0.02

So a decrease of 2% each year.