Example 3

Money deposited in a bank account earns interest on the initial amount deposited as well as any interest earned as time passes. This compound interest can be described by the expression , where represents the initial amount deposited, represents the interest rate, and represents the number of years that pass. How does a change in each variable affect the value of the expression?
  1. Refer to the expression given: .
  2. Determine what effect, if any, changing the value of has.
  3. Determine what effect, if any, changing the value of has.
  4. Determine what effect, if any, changing the value of has.
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