Question

Given an exponential function for compounding interest, A(x) = P(1.02)x, what is the rate of change?

Answer 1

2%

0.02%

1.02%

102%

Answer 2

have you covered the compound interest formula yet?

Answer 3

No

Answer 4

do you know how to change percentage quantities to decimal format?

Answer 5

No im very lost on this one.

Answer 6

\(\bf {\color{red}{ a}}\%=\cfrac{{\color{red}{ a}}}{100}
\qquad \qquad
{\color{red}{ 7}}\%=\cfrac{{\color{red}{ 7}}}{100}\implies \textit{what do you think?}\)

Answer 7

is it .02?

Answer 8

7/100? is not 0.02

Answer 9

I know its .07 i am talking about the answer

Answer 10

ohh .. well.. how did you 0.02?

Answer 11

\(\bf A(x)=P(1.02)^x\qquad \textit{compound formula}\implies A=P\left(1+\frac{r}{n}\right)^{nx}
\\ \quad \\
n=periods\qquad x=years\qquad r=rate\textit{ in decimal format}
\\ \quad \\
\textit{for 1 year and annual compounding, so 1 period per year}
\\ \quad \\
A=P\left(1+\frac{r}{n}\right)^{nx}\implies A=P\left(1+\frac{r}{1}\right)^{1x}\implies A=P(1+r)^x\)

so.. what do you think?

Answer 12

This doesn't make sense. Its okay Thanks for trying!

Answer 13

It's 2%

you divide compound 100 then add to 1