Question

The annual interest rate on a $10,000 loan is 18%. The exponential function that represents this is y = 10000(1.18t). Write the exponential function for this loan in terms of a monthly interest rate.

A) y = 10000(1.014)t
B) y = 10000(1.014)12t
C) y = 10000(1.098)t
D) y = 10000(1.098)12t

Answer 1

it B i just took the test

Answer 2

`y=10000(1.015)^(12t)`

option-B......Answer

Explanation:

We are given

amount taken for loan =$10000

so, P=10000

annual interest rate =18%

r=0.18

now, we can use formula

`y=P(1+(r)/(n) )^(nt)`

Since, it is compounded monthly

so, n=12

we can plug values

`y=10000(1+(0.18)/(12) )^(12t)`

`y=10000(1.015)^(12t)`