The student is using the formula [ A = P(1 + i)^n ]
A = final amount
P = principal amount (starting amount)
i = interest rate
n = number of years
The function the student wrote doesn't look as similar as the one shown above because he/she simplified what was in the parenthesis. This is what the function looks like before he/she simplified.
f(x) = 5.00(1 + 0.012)^x
Looking at the formula I put above, we can see that "5.00" is P in the original formula. So, this is the principal/starting amount.
Therefore, the correct answer is [ D. The starting balance of the savings account ]
Best of Luck!
