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Sarah invests her graduation money of $1.750 in an annuity that pays an
interest rate of 6% compounded annually. Write an exponential function
that describes her investment growth."
f(1) = 1, 750(1.06)
f(0) = 1,750(1.6)*
O
Option 1
O
Option 2
f() = 1, 750(.94)"
f(x) = 1, 7500.06)"
O
Option 3
O
Option 4

Respuesta :

We have been given that Sarah invests her graduation money of $1,750 in an annuity that pays an  interest rate of 6% compounded annually. We are asked to write an exponential function for her investment growth.

We will use compound interest formula to solve our given problem.

[tex]A=P(1+\frac{r}{n})^{nt}[/tex], where

A = Final amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = Time in years.

[tex]6\%=\frac{6}{100}=0.06[/tex]

Since interest is compounded annually, so [tex]n=1[/tex].

[tex]f(t)=1750(1+\frac{0.06}{1})^{1\cdot t}[/tex]

[tex]f(t)=1750(1+0.06)^{ t}[/tex]

[tex]f(t)=1750(1.06)^{ t}[/tex]

Therefore, the function [tex]f(t)=1750(1.06)^{ t}[/tex] describes Sarah's investment growth.

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