Advanced MathHardChoosing the growth model from a description
Advanced Math practice question
A savings account starts with $500 and earns 3% interest, compounded once a year, with no other deposits. Which function gives the balance B, in dollars, after t years?
- A. B(t) = 500(1.03)ᵗCorrect
- B. B(t) = 500 + 15t
- C. B(t) = 500(0.03)ᵗ
- D. B(t) = 500(3)ᵗ
Answer: A. B(t) = 500(1.03)ᵗ
Compound interest multiplies by 1.03 each year: 500(1.03)ᵗ.
Why the other answers are wrong
- B. B(t) = 500 + 15t
- 500 + 15t is simple interest (3% of the original each year), not compound.
- C. B(t) = 500(0.03)ᵗ
- 0.03 would shrink the balance to almost nothing; the factor is 1 + 0.03.
- D. B(t) = 500(3)ᵗ
- A factor of 3 would triple the balance each year.
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