CCGPS CA 1.1.2 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, represents the number of months that pass. How does a change in each variable affect the value of the expression?
  1. Refer to the given expression: .
  2. Changing the value of does not change the value of the factor , but it will change the value of the expression by a factor of . In other words, the change in will multiply by the result of .
  3. Similarly, changing changes the base of the exponent (the number that will be multiplied by itself), but does not change the value of . This change will affect the value of the overall expression.
  4. Changing changes the number of times will be multiplied by itself, but does not change the value of . This change will affect the value of the overall expression.
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