Question

The amount of money, in dollars, in a savings account after x years is given by M(x) = 10,000(1.03)x. What does the value 1.03 represent?

A) The original deposit was $103.
B) There is a 3 percent increase in the savings account each year.
C) The savings account earns $103 interest per month.
D) There is a 103 percent increase in the savings account each year.

Answer 1

Your equation should be
M(x) = 10,000(1.03)^x , where x is the number of years
to me it says, the interest rate is 3% per annum, compounded annually
which of the choices best matches that description ?

Answer 2

There is a 3 percent increase in the savings account each year.