Question

A savings account compounds interest, at a rate of 25% once a year. Eve puts 500 in the account as the principal. How can eve set up a function to track the amount of money she has?

Answer 1

f(x) = 500(1.25)^x would be the function

Answer 2

Function to track the amount of money Eve has is
`A(n)=500((5)/(4))^n`

Explanation:

Given:

Principal Amount in the account, P = $ 500

Rate of interest, r = 25%

Interest is compounded annually.

To write a function to track amount in the account.

We use the Formula of amount of the compound interest.

`A=P(1+(r)/(100))^n`

By, Substituting given values we have

Amount in the account,
`A=500(1+(25)/(100))^n`

`A=500((5)/(4))^n`

where, n is number of year.

Therefore, Function to track the amount of money Eve has is
`A(n)=500((5)/(4))^n`