Is the compound interest formula—such as would

be used to calculate a car loan—an example of a function? If yes, of what type

of function is it an example of? Why might you identify it with that type of

function?

## Is the compound interest formula—such as would

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# 1 Answer

Lets look at this just from a 'real life' way.

If the interest rate is greater than 0, then the compound interest will always give you back MORE than what you started with. Therefore the graph of this function will be an increasing curve (or line), If it is always increasing then there will never be a spot where we get TWO values of y for ONE value of x, ITS A FUNCTION!

the funtction looks like a = p(1+r/n)^{nt}, Hey, it looks like an exponential function to me.

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