Answer:
Initial value, a0 = $1000
Rate of interest, a1 = 0.03 = 3%
Step-by-step explanation:
The amount of money in an account after t years is given by the expression :
[tex] Amount = P(1+\frac{Rate}{n})^{n\times Time}...........(1)[/tex]
where P is the initial amount or the Principal value of the account, n is the number of times the interest is compounded in a year.
Now, According to question, the amount of money in an account after t years is given by the expression :
[tex]Amount = 1000(1.03)^t\\\\\text{This expression can be rewritten as : }\\\\Amount = 1000(1+\frac{0.03}{1})^{1\times t}[/tex]
Now, on comparing the above expression with (1),
We get, P = 1000 , Time = t years , n = 1 and Rate = 0.03
Hence, Initial value, a0 = $1000
Rate of interest, a1 = 0.03 = 3%
