+157 An investment is advertised as returning 0.6% every month, compounded monthly. If $10,000 is invested, the growth can be modeled by the equation A(t) = 10,000(1.006)^12t. What is the equivalent annual growth rate for this investment (rounded to the nearest tenth of a percent) and what is it worth (rounded to the nearest thousand dollar) after 20 years?
Hint: Find the value of 1.00612 on your calculator.
A. 5.0% and $42,000
B. 7.2% and $11,000
C. 7.4% and $42,000
D. 7.2% and $40,000
+2592 .6% monthly correct? And 12 months right? .6*12=7.2
That leaves option b and C
We can rule B out with common sense. Is $10,000 gonna earn only $1,000 in 20 years? No
But algebraically shown here
10000(1.006)^(12*20) = 42025.74 Where 20 is T in time
This isn't rounding to 40,000 but it is farther away from $11,000 by a longshot
