Question

Creating an Exponential Model

Answer 1

Answer:

P = $300

r = 0.15

n = 12

$544.61  (to the nearest cent)

$P(1+r)^t$

$524.70  (to the nearest cent)

Step-by-step explanation:

P = principal amount = $300

r = annual interest rate in decimal form = 15% = 15/100 = 0.15

n = number of times interest is compounded per unit t = 12

How much she'll owe in 4 years

P = 300

r = 0.15

n = 12

t = 4

$P(1+\frac{r}{n})^{nt}=300(1+\frac{0.15}{12})^{12 \times 4}$

= $544.61  (to the nearest cent)

Yearly compounding interest rate

$P(1+r)^t$

How much she'll owe in 4 years at yearly compounding interest

$P(1+r)^t=300(1+0.15)^4$

= $524.70  (to the nearest cent)