Question

A $50,000 investment earns 18% annually. If B represents the balance and t represents the number of years, determine an expression that gives the account balance, B, after t years. Also, determine an equivalent expression that displays the effective monthly interest rate.

A) B = 50000(1.18)t; B = 50000(1.14)^12t
B) B = 50000(1.18)t; B = 50000(1.014)^12t
C) B = 50000(1.018)t; B = 50000(1.14)^12t
D) B = 50000(1.18)t; B = 50000(0.014)^12t

Answer 1

B

Explanation:

Answer is b

Answer 2

Answer:B

Explanation:

B = 50000(1.018)t; B = 50000(1.14)12t

B = 50000(1.18)t; B = 50000(1.014)12t Raise the original base to the power of

1

12

to get the new base, and change the exponent to 12t.