Question

Given an exponential function for compounding interest, A(x) = P(1.03)x, what is the rate of change?

Answer 1

0.03*100=3%
Hope it helps :-)

Answer 2

Answer: 3%

Explanation:

We know that the compound amount after x years will be given by the exponential function as:-

`A(x)=P(1+r)^x`, where r is the rate of interest in decimal.

The given exponential function for compounding interest is
`A(x)=P(1.03)^x` which can be written as

`A(x)=P(1+0.03)^x`

On comparing the equation to the standard form , we get the rate of interest =0.03

In percent the rate of interest r =
`0.03*100=3\%`