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