Answer: 3%
Step-by-step explanation:
We know that the compound amount after x years will be given by the exponential function as:-
[tex]A(x)=P(1+r)^x[/tex], where r is the rate of interest in decimal.
The given exponential function for compounding interest is [tex]A(x)=P(1.03)^x[/tex] which can be written as
[tex]A(x)=P(1+0.03)^x[/tex]
On comparing the equation to the standard form , we get the rate of interest =0.03
In percent the rate of interest r =[tex]0.03\times100=3\%[/tex]
