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At the beginning of the year, Cassandra talks to her cousin about a $1000 loan which she will repay after she graduates from college. On December 31st, her cousin will add 12% interest to the balance of the loan outstanding. If Cassandra makes no payments on the loan until she graduates, which equation shows the loan balance b after n years?

Respuesta :

Using an exponential function, it is found that the loan balance b after n years is given by:

[tex]b(n) = 1000(1.12)^n[/tex]

What is an exponential function?

An increasing exponential function is modeled by:

[tex]A(t) = A(0)(1 + r)^t[/tex]

In which:

  • A(0) is the initial value.
  • r is the growth rate, as a decimal.

In this problem, we have that:

  • She took a $1,000 loan, hence A(0) = 1000.
  • The interest rate is of r = 0.12.

Hence the balance b after n years is given by:

[tex]b(n) = 1000(1.12)^n[/tex]

More can be learned about exponential functions at https://brainly.com/question/24372153

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