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The expression 10,600(1.0385)x represents the amount of money in an investment account with interest that compounds annually for x years. Interpret the meaning of the expression.


A

The initial investment is $10,385, and the growth rate of the investment is 1.06%.

B

The initial investment is $10,385, and the growth rate of the investment is 6%.

C

The initial investment is $10,600, and the growth rate of the investment is 1.0385%.

D

The initial investment is $10,600, and the growth rate of the investment is 3.85%.

Respuesta :

Answer:

The correct option is option (D)

The initial investment is $10,600 and the growth rate of the investment is 3.85%.

Step-by-step explanation:

The formula of compound interest:

[tex]A=P(1+r)^n[/tex]

A= Total amount after n years

P= Initial value of deposit

r= rate of interest compound annually

n= time is in year

Given expression is

[tex]A=10,600(1.0385)^x[/tex]

[tex]A=10,600(1+0.0385)^x[/tex]

Now we compare the given expression with the compound interest formula

So,

P= 10,600

r=0.0385 =3.85%

So, the initial investment is $10,600 and the growth rate of the investment is 3.85%.

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