Can someone check the work on this problem?

Jacob has not paid his $320 credit card bill and it was sent to collections. His interest rate is 43%, compounded daily.
Write an exponential function that models this situation where y is the balance of Jacobs account and x is time in years.

Exponential Function= y=ab^x

So I came up with y= 320 x 0.43^x

I still am not sure. Any help?

Question

Can someone check the work on this problem?

Jacob has not paid his $320 credit card bill and it was sent to collections. His interest rate is 43%, compounded daily.
Write an exponential function that models this situation where y is the balance of Jacobs account and x is time in years.

Exponential Function=  y=ab^x

So I came up with y= 320  x  0.43^x

I still am not sure. Any help?

astrophysics · Answer

$$y=320(0.43)^x$$ like this?

astrophysics · Answer

That doesn't look right

hero · Answer

You must take into account that the 43% is compounded daily.

astrophysics · Answer

Right

anonymous · Answer

That was my suspicion! What do you guys think?

astrophysics · Answer

You need to consider it annually, so any idea how to reconstruct your model? :P

hero · Answer

First you should recall the formula for compound interest.

anonymous · Answer

Here is my guess: y=320 x 0.43/365^x

mathmale · Answer

You've guessed?  In the long run it'd save you time to learn the correct formula.

Would you please look up the "amount" formula for compound interest?  It depends upon the variables P (principal), r (annual interest rate as a decimal fraction), n (the number of times interest is paid each PERIOD (which is not 1 year in this case), and t (the number of years).

Your 43/365^x is, unfortunately, pretty far off.  Rather than criticize it, I ask you again to look up, write down and practice the proper formula, and using it to check your own proposed equation.