Given an exponential function for compounding interest, A(x) = P(.91)x, what is the rate of change?

Question

There are four possible answers to this problem that were given to me:

A -0.09%

B -9%

C .91%

D 91%

 

Thank you so much in advance. If you could please explain how you got your answer that would be amazing!

Answer 1

The general form of an exponential function is:

 

f(x) = a·(1+rate)^x

 

You have A(x) = P·(0.91)^x.  So 1 + rate = 0.91.  Solve for the rate then convert to percent.  BY the way, don't invest any money in this account.  ;-)