Where did we get the 1.04 value for quantity a? The question just states it’s denoted by x. So is it safe to assume x^9 will be less than (1.04)^12x? When solving the problem Greg also assigned the amount 1.04 for quantity A

and that confused me.

Where did we get the 1.04 value for quantity a? The question just states it’s denoted by x. So is it safe to assume x^9 will be less than (1.04)^12x? When solving the problem Greg also assigned the amount 1.04 for quantity A

and that confused me.

4% more of x is 1.04x. Also this is simply a case of compounded interest - you don’t raise x, but 1.04. If this confuses you, consider what happens after 4 months, 8 months, and so on.

Also see the Compound Interest videos on PrepSwift.