one $2000 in simple interest rate of 4.5% per year or $2000 at a compound interest rate of 4% per year.

Question

Consider a scenario where you can invest $2000 in a savings account that has either a simple interest rate of 4.5% per year or $2000 at a compound interest rate of 4% per year.

Write an equation that models the amount that each savings account is worth, y, as a function of the number of years that have passes, x.

Answer 1

for simple interest the equation is

y = 2000(1 + 0.045x) because you would start with a face value of $2000 and then earn interest of 4.5% = 0.045

then for compound interest you can take

y = 2000(1.04)^x assuming that it compounds annually

so you could use those by plugging in values of "x" for years and then seeing what the end value in the account is after calculation

Answer 2

Simple:   y= 2000 * ( 1.045) * x

 

Compound:y= 2000 * (1.045)^x