AnswersMathematics IIIPractice TestQuestion 6
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Practice Test

Question 6 • Mathematics III

A customer deposits 1 dollars comma 000 in an account in which the interest is compounded annually. The table shows the balances in the account at the end of each year. Amount in Account vs. Number of Years Amount in Account, cap A Number of Years After Initial Deposit, t 1 comma 000 0 1 comma 080 1 1 comma 166 point 4 0 2 1 comma 259 point 7 1 3 1 comma 360 point 4 9 4 Which equation best represents the data in the table?

Answer
A
cap A is equal to 1000 times 1 point 0 8 to the t th power
B
cap A is equal to 1000 times 1 point 8 to the t th power
C
cap A is equal to 800 to the t th power
D
cap A is equal to 1080 to the t th power

Explanation

At year 0, the account has $1,000, so that is the starting amount. From year to year, the balance is multiplied by 1.08: for example, $1,000 × 1.08 = $1,080, and $1,080 × 1.08 = $1,166.40. Therefore, the equation is A = 1000 × 1.08^t, which is choice D.

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