Question

The function
A
(
x
)
=
6000
(
1
+
0.02
)
x
represents the value of investment A after
x
years.

The function
B
(
x
)
=
6000
(
1
+
0.015
)
x
represents the value of investment B after
x
years.



Which statement is TRUE about the investments?



A.
Both investments increase in value at the same rate.

B.
Both investments decrease in value at the same rate.

C.
The value of investment A increases at a faster rate than the value of investment B.

D.
The value of investment A decreases at a faster rate than the value of investment B.

Answer 1

C. The base 1.02 > 1.015, so both grow (factors >1) and A grows faster (2% vs 1.5% per year).