ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You invest $400 for 5 years at an interest rate of 4.29% each year. Which equation models this?
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y=400(1-0.0429)5
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y=400(1+.0429)5
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y=400(1+ 4.29)5
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y=400e0.049*5
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Explanation:
Detailed explanation-1: -Using the rule of 72, you would estimate that an investment with a 5% compound interest rate would double in 14 years (72/5).
Detailed explanation-2: -The equation f(t) = 12(1.015)t models the population of elephants in a wildlife refuge after t years since 1975. What does the value 1.015 represent? The number of elephants was 1, 015 in 1975. The number of elephants increases by 1.5% each year.
Detailed explanation-3: -For example, if the interest rate earned is 6%, it will take 12 years (72 divided by 6) for your money to double. If you want your money to double every 8 years, you will need to earn an interest rate of 9% (72 divided by 8).
There is 1 question to complete.