Question

The following function represents the value of a house, in dollars, after x years:

f(x) = 242,000(1.04)x

What does 1.04 represent? (5 points)

Answer 1

So in an exponential equation in this case, the general formula is

\(f(x)=P(1+r)^t\)

P is the principal/starting amount
r is the rate
t is the time