Exercise 6 Page 285

Compound interest is the interest earned on the principal and on previously earned interest. Let's recall the formula that gives the balance y of an account earning compound interest. y= P( 1+r/n )^(n t) In this formula, P is the principal, or initial amount, r is the annual interest rate written in decimal form, t is the time in years, and n is the number of times the interest is compounded in one year. Let's pay close attention to the given exercise.

We can immediately identify P as 500. Also, the annual interest rate, written as a decimal number, is 0.09. Finally, since the interest is compounded monthly and there are 12 months in one year, we have that n= 12. Let's substitute these values into the formula and simplify.

To graph the function we will make a table of values. Since time is always greater than or equal to 0, we will assign non-negative values for t.

Let's now plot and connect the obtained points. Since both variables are non-negative, we will only draw in the first quadrant.

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