1.08t can be written as (1.081/12)12t to give the approximate equivalent monthly interest rate based on an annual rate of 8%. Use the properties of exponents to transform the expression into a single exponent expression
Accepted Solution
A:
Because t is given in years and 1.08 = 1 + 0.08, the annual percent increase is 8%. To find the monthly percent increase that gives an 8% annual increase, use the fact that t = [tex] \frac{1}{12} * 12 t[/tex] and the properties of exponents to rewrite the model in a form that reveals the monthly growth rate.