SOLUTION: Abby started with $12,000 in her savings account. The banks interest is 5% annual percentage rate compounded monthly. What is the model as an exponential growth function?

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Question 1207164: Abby started with $12,000 in her savings account. The banks interest is 5% annual percentage rate compounded monthly. What is the model as an exponential growth function?
Answer by Shin123(626) About Me  (Show Source):
You can put this solution on YOUR website!
Recall the compound interest formula, P%281%2Br%2Fn%29%5E%28nt%29, where P is the principal, r is the interest rate (as a decimal), t is the amount of years, and n is how many times a year it is compounded. We know all of these variables except for t, so it will be a function in terms of time. Plugging everything in, we get 12000%281%2B0.05%2F12%29%5E%2812t%29. To simplify it further and have the exponent be just t, we can rewrite the function as 12000%28%281%2B0.05%2F12%29%5E12%29%5Et. The inner expression is %281%2B0.05%2F12%29%5E12, and we can evaluate it to get the function as 12000%2A1.0511619%5Et (rounding the inner constant to 7 decimal places. If you want, you can calculate the expression to more decimal places, or just keep it as 12000%281%2B0.05%2F12%29%5E%2812t%29, depending on which one is better for you.