Question: Cresida borrowed $200 from her friend to purchase a Xerox machine at 10% compound interest. The function f (x) = 200(1.10)x describes the money she has to pay after x years. Which of the graphs represents the function over a period of 4 years?
A ) Graph 1 B ) Graph 2
Steps to derive
[Given function.] 1f(x) = 200(1.10)x
[Substitute 0 for x.] 2f(0) = 200(1.10)0
[Simplify.] 3 = 200
[Substitute 1 for x.] 4f(1) = 200(1.10)1
[Simplify.] 5 = 220
[Substitute 2 for x.] 6f(2) = 200(1.10)2
[Simplify.] 7 = 242
[Substitute 3 for x.] 8f(3) = 200(1.10)3
[Simplify.] 9 = 266.2
[Substitute 4 for x.] 10f(4) = 200(1.10)4
[Simplify.] 11 = 292.82
12 The money Cresida has to pay after 4 years is $292.82.
13 Among the graphs, Graph 1 represents the function over a period of 4 years.
