Question

Karl has $400 in a savings account. The interest rate is 10%, compounded annually. Which type of model best fits this situation?

Answer 1

He prolly only got like 300 some left

Explanation:

Answer 2

This is an exponential model.

Explanation:

The formula for compound interest is

`y=a(1+(r)/(n))^(nt)`, where a is the principal, r is the interest rate, n is the number of times per year the interest is compounded, and t is the number of years.

Since the number of years will be a variable, we have an equation raised to a power of x; this is an exponential function.

The equation for this would be

`y=400(1+(0.1)/(1))^(1t)\\\\y=400(1+0.1)^t\\\\y=400(1.1)^t`