Question

The value of a saving account earning interest after a few years is given by the equation:




y=1500(1+0.02)^3


What does the 1500 represent in the exponential equation? What does the 3 represent in the exponential equation?

A.
time; rate

B.
initial value; rate

C.
rate; starting point

D.
initial value; time

Answer 1

In the equation \( y = 1500(1 + 0.02)^3 \):

- The 1500 represents the **initial value** or the principal amount of the saving account.
- The 3 represents the **time** in years that the savings account has been earning interest.

So the correct answer is:

**D. initial value; time**