How do I solve d and e?

Question

You start an account with $500 and an interest rate of 6% compounded yearly. How

much is in the account after 3 years?

 

         a) Exponential growth or decay:

           b) Identify the initial amount:

           c) Identify the growth/decay factor:

           d) Write an exponential function to model the situation:

          e) “Do” the problem

is (a) growth

is (b) $500

is (c) 6% or 1.06

is D y=500(1.06)^3, but 3 times something because its compounded???

Answer 1

All correct except, 3 is not a multiplier, it is an exponent.

(1.06)³ = (1.06)(1.06)(1.05)