Suppose you receive a gift of $1,000 and decide to open a CD is (certificate of

Question

Suppose you receive a gift of $1,000 and decide to open a CD is (certificate of deposit) as a low risk investment. The best CD rate you could find 2.25%, which means that your original investment will grow at a rate of 2.25% each year. Which exponential model predicts the amount of money you have in the account t years from your initial deposit date? y = 1,000 (2.25) y = 1,000 (0.0225) y = 1,000 (1.225) y = 1,000 (1.0225) Exponential Model: Recall the general exponential function y = C middot b, where C and b are positive numbers. Which of the following conditions represents exponential growth? when b is equal to 1 number When b is any positive number When b is less than 1 When b is greater than 1

Explanation / Answer

Ans:y=C*(b)t

Where b=1+(r/100)

here r=2.25%

b=1+(2.25/100)

b=1+0.0225

b=1.0225

Hence ,y=1000*(1.0225)t

It grows exponentially when b is greater than 1.

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