Question

Josiah invests $360 into an account that accrues 3% interest annually. Assuming no deposits or withdrawals are made, which equation represents the amount of money in Josiah’s account, y, after x years?

y = 360(1.3)x
y = 360(0.3)x
y = 360(0.03)x
y = 360(1.03)x

Answer 1

y = 360(1.03)^x

Since the annual growth rate is 3%, each year the amount is multiplied by 1 + 0.03 = 1.03, so after x years the amount is 360(1.03)^x.