Answer:
Option 3
The rate of change is -5%
Step-by-step explanation:
Given : An exponential function for compounding interest, \(A(x) = P(.95)^x\)
To find : What is the rate of change?
Solution :
The general form of an exponential function is:
\(f(x) = a(1+r)^x\)
Where, a is the initial amount,
(1+r) is the rate of change,
r is the growth or decay factor
We have given, \(A(x) = P(.95)^x\)
Rate of change is
\(1+r=0.95\)
\(r=0.95-1\)
\(r=-0.05\)
Convert to percent,
\(r=-0.05\times 100=-5\%\)
Therefore, Option 3 is correct.
