The function f (x) = 1,250 (1 + ) 4t models the balance in a savings account. Which statement accurately describes the account?

A.

The account had an initial balance of $1,250 and compounds monthly at an interest rate of 0.1%.

B.

The account had an initial balance of $1,250 and compounds quarterly at an interest rate of 12%.

C.

The account had an initial balance of $1,250 and compounds monthly at an interest rate of 4%.

D.

The account had an initial balance of $1,250 and compounds quarterly at an interest rate of 1.2%.

d

Explanation:

the interest rate is 0.012

full function is f (x) = 1,250 (1 + 0.012/4) 4t

Answer is either B or D. See explanation

Explanation:

f (x) = 1,250 (1 + ) 4t

Here,

Initial Balance = $1,250

Compounding rate = (1 + Interest Rate)

Number of periods = t

Quarterly compounding = 4

Option A is wrong because it says the compounding interest rate is monthly.

Again, Option C is incorrect as it suggests the compounding interest rate is monthly.

Option B is partially correct as the function does not have the interest rate. However, it is compounded quarterly, and the function's number of periods is multiplied by 4.

Option D is partially correct as the function does not have the interest rate. However, it is compounded quarterly, and the function's number of periods is multiplied by 4.

Now, if the function includes (1 + 0.12), the option B will be correct as the interest rate is 12%.

On the other hand, if the function includes (1 + 0.012), the option D will be correct as the interest rate is 1.2%.