Leticia invests $200 at 5% interest. If y represents the amount of money after x time periods, which describes the graph of the exponential function relating time and money?The initial value of the graph is 200. The graph increases by a factor of 1.05 per 1 unit increase in time.The initial value of the graph is 200. The graph increases by a factor of 5 per 1 unit increase in time.The initial value of the graph is 500. The graph increases by a factor of 2 per 1 unit increase in time.The initial
Answer
A
The initial value of the graph is 200. The graph increases by a factor of 1.05 per 1 unit increase in time.
B
The initial value of the graph is 200. The graph increases by a factor of 5 per 1 unit increase in time.
C
The initial value of the graph is 500. The graph increases by a factor of 2 per 1 unit increase in time.
D
The initial value of the graph is 500. The graph increases by a factor of 1.02 per 1 unit increase in time.
Explanation
The initial amount is $200, so the graph’s initial value is 200. A 5% interest rate means the amount is multiplied each time period by 1 + 0.05 = 1.05. Therefore, the correct description is that the graph starts at 200 and increases by a factor of 1.05 per time period.
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