Algebraic Expressions Question
View this question.
Add this question to a group or test by clicking the appropriate button below.
Grade 10 Algebraic Expressions CCSS: HSA-SSE.A.1, HSA-SSE.A.1b
The value of someone's money in an account that earns compound interest can be modeled by the expression P(1+rn)n t, where P is the original amount invested, r is the annual interest rate, n is the compounding period (for example, if it is monthly, then n=12), and t is the amount of time the money has been in the account. If someone wants to invest their money in an account that has compound interest, how would their balance in their account differ after 3 years if they invested $1,000 vs $2,000?
- If they invest $2,000 and the interest rate is less than 1%, the investment will be less than double. If the interest rate is 1% or more, the end balance will be more than double.
- The final amount would be 8 times as large if they invest $2,000, since all the other variables cancel out, and just the exponent of 3 is left.
- The final amount would be double if they invest $2,000.
- It is not possible to say, without knowing the compounding period.