Lauren:

A minor point.

You are asked to "construct a function that represents the amount of interest."

The answer by Tutor Lessa R. assumes that interest is reinvested. From the formula given in Lessa R.'s answer, the function that represents the amount of
compound interest in t years, I(t, C)), say,(the C in the forumla indicates compounding) is I(t, C)) = B(t) - P = P{(1+r)^{t} - 1]. You can compute I(t,C) from Lessa R.'s answer to be $624.32

The domain of the above function is three dimensional, a "point" in the domain is (P, r, t), where P is a positive real number, r is a real number between 0 and 1 (being a rate) and t is a non-negative integer, t = 0, 1, 2, ...... The
range of the function I(t,C) is a positive real number.

If, on the other hand, the interest is taken out each year, the problem becomes that of simple interest. If r is the rate of interest, Pr is the annual interest earned on the investment of P in one year. So, in t years the amount of simple interest earned is simply t (Pr).

So the the function that represents the amount of simple interest can be called I(t, S) = t(P)(r) (S for simple),

The domain and range of I(t,S) are the same as those of I(t,C).

In your problem I(10,S) = 10(1300)(0.04) = 520. (Notice the difference I(t,C) - I(t,S), effect of compounding!)

Please post a comment if you have any questions.

Dattaprabhakar (Dr. G.)

Irvine, CA