Question

Please help me? Fan/medal/written testimony
Given an exponential function for compounding interest, A(x) = P(.91)x, what is the rate of change?

Answer 1

@amistre64 @sleepyjess @RedNeckOutLaw @TheSmartOne

Answer 2

what is the general formula for compounding interest?

Answer 3

we have a specific example, and need to compare it to the general formula

Answer 4

I don't understand this question at all. could you go more in depth? @amistre64

Answer 5

compound interest is generated by taking the interest of the pirincple plus added interest.

interest is just a percentage (a rate) of the starting balance called the principal, P

for 1 period: interest added is just P(r) giving us a new balance P + Pr, or simpy P(1+r)

now for the next period we take the interest of the new balance and add it to itself again:

P(1+r) + P(1+r)r = P(1+r)(1+r) = P(1+r)^2

as we continue this process we develop a rule in general:

for any given period, x, the balance in the account is determined by the formula:
P(1+r)^x

Answer 6

equating these things we have:

P(1+r)^x = P(.91)^x

or

1+r = .91 is the best i can imagine unless im reading it incorrectly

Answer 7

it either that or Pr^x = P(.91)^x and theyve worded it rather poorly

Answer 8

FLVS sucks for wording. their famous for that lol I can say that by an educated guess, it would be -0.09 because its decreasing?

Answer 9

that does seem to be a fair assessment of the information given yes -.09

Answer 10

Thank you ^.^

Answer 11

youre welcome. dbl chk to make sure its not spose to be P(1.91)^x other than that .... you should be good :)

Answer 12

wait! it is P(1.91)^x

Answer 13

@amistre64