Consider this formula for finding the total amount of money generated by an account receiving compound interest: A=200(1+0.08/1)^1⋅t

. When comparing to y=a(1+r)^t
, the general formula for exponential growth, which part of the compound interest formula compares best with the variable r?(1 point)
Responses

1
1

0.08
0.08

200
200

1t

1 answer

In the formula for finding the total amount of money generated by an account receiving compound interest, \( A = 200(1 + 0.08/1)^{1 \cdot t} \), we can compare it to the general formula for exponential growth, \( y = a(1 + r)^t \).

In this comparison:

  • \( a \) corresponds to the initial amount, which is \( 200 \).
  • \( r \) is the growth rate.
  • \( t \) is the time.

In the compound interest formula, \( (1 + 0.08/1) \) can be simplified to \( (1 + 0.08) \), which equals \( 1.08 \).

Thus, \( r \) corresponds to \( 0.08 \) (the interest rate).

Therefore, the part of the compound interest formula that compares best with the variable \( r \) is:

0.08.