Model the equation in the given context
An investment of $500 is compounded monthly at a rate of 3%. What is the equation that models this situation? Graph the equation.
- Read the problem statement and then reread the problem, determining the known quantities.
- Substitute the known quantities into the general form of the compound interest formula, [math][math], for which [math] is the initial value, [math] is the interest rate, [math] is the number of times the investment is compounded in a year, and [math] is the number of years the investment is left in the account to grow.
- Graph the equation.