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A bank offers two different investment options.

Option 1 pays compound interest of 3.6% compounded monthly, meaning that each month the balance increases by 112 of 3.6% of the previous month's balance.

Option 2 pays simple interest of 6% per year, meaning that each year the balance increases by 6% of the initial deposit.

Which type of function can be used to model each option?

Sagot :

The function that can be used to represent option 1 is an exponential function.

The function that can be used to represent option 2 is a linear function.

Linear functions

A linear function is a function that has a single variable raised to the power of 1. Linear functions are usually in the form x + 10.

Option 2 expressed as a linear function is b x 0.06 x 1

Where b represents the amount of money deposited.

Exponential functions

An exponential function is usually in this form: y = [tex]a^{x}[/tex].Option 1 expressed as an exponential function is p(1.036)^y

Where:

  • p = principal
  • y = number of years

To learn more about compound interest, please check: https://brainly.com/question/18760477

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