Dynamic systems have a state that is ever changing as a result of changes in state variables.In your own understanding describe the terms system, system state, and state variable givingan example from Banking system. (6 Marks)

1. System: A system is a set of interacting or interdependent components forming an integrated whole. In the context of a banking system, it includes all the components that work together to provide banking services. This includes the bank's personnel, the software used for transactions, the customers who use the bank's services, and the policies and regulations that govern how the bank operates.

2. System State: The system state refers to the current status or condition of a system at a particular point in time. It is a snapshot of the various conditions of the system. For example, in a banking system, the system state could refer to the current financial status of the bank, the number of active accounts, the number of loans given out, etc.

3. State Variable: A state variable is a parameter that defines the state of a system. It is a quantity that can change as the system evolves over time. In a banking system, state variables could include the bank's total assets, the interest rates on loans, the number of customers, etc. These variables change over time and affect the state of the banking system.

For example, if a bank gives out a large number of loans, the state variable 'number of loans given out' increases. This changes the state of the banking system as it now has more money to collect in the future and possibly more risk due to potential defaults.