Question

josiah invests $360 into an account that accrues 3% interest annually. assuming no deposits or withdrawals are made, which equation represents the amount of money in josiah’s account, y, after x years?
$y = 360(0.03)^x$
$y = 360(1.03)^x$
$y = 360(0.3)^x$
$y = 360(1.3)^x$

Explanation:

Step1: Recall compound growth formula

The standard annual exponential growth formula for compound interest is $y = P(1 + r)^x$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $x$ is the number of years.

Step2: Identify given values

$P = 360$, $r = 0.03$ (since $3\% = \frac{3}{100} = 0.03$)

Step3: Substitute values into formula

Substitute $P$ and $r$ into the formula:
$y = 360(1 + 0.03)^x = 360(1.03)^x$

Answer:

$y = 360(1.03)^x$