Select True or False for each statement.
2 answers:
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Answer:
Step-by-step explanation:
If t is the number of years, then 12t is the number of months interest is compounded. The interest rate (growth rate) used each month is 1/12 of the annual rate, so is
monthly growth rate = 2%/12 ≈ 0.167% = 0.00167
Then the monthly growth factor is ...
monthly growth factor = (1 + monthly growth rate) = 1.00167
The overall account value is the initial value multiplied by this growth factor a number of times equal to the number of months, 12t. Repeated multiplication is indicated by an exponent:
A = 1500(1.00167)^(12t) . . . . . . . matches the last choice