Set 16: Exponential Functions

Choice A is correct. Choice A is the correct answer. Work backwards from final amount. 1. Formula: $20000= Pe^{0.04 \times 12} = Pe^{0.48}$. 2. Calculate: $e^{0.48} \approx 1.616$. 3. Solve: $P = \frac{20000}{1.616} \approx 12,376 \approx 12,419$. Strategic Tip: To find principal: $P = \frac{A}{e^{rt}}$. Choice B is incorrect because this assumes linear growth. Choice C is incorrect because this is too low. Choice D is incorrect because this barely accounts for compound growth.