Question

Mike has a bank account whose balance is represented by A(t)=10,000*3.138^t. Where t is in years. Write the function so it reflects the monthly rate of interest . Around the nearest percent

Answer 1

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Answer:

A(m) = 10000×1.10^m; 10% monthly interest

Explanation:

If t is the time in years and m is the corresponding time in months, then we have ...

m = 12t

t = m/12

So, the balance is ...

A(t) = 10000×3.138^t

A(m) = 10000×3.138^(m/12) = 10000×(3.138^(1/12))^m

A(m) = 10000×1.10^m

The monthly interest rate is 10%.

_____

The monthly growth factor 1.10 is 1 more than the monthly growth rate.

growth rate = growth factor -1 = 1.10 -1 = 0.10 = 10%.