Concept explainers
To check: The given statement: “The compound interest formula is an exponential growth function” is true or false.
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
True.
Explanation of Solution
Given Information: The compound interest formula is
Formula used:
An exponential growth can be modeled by the function
The base b is called growth factor.
The compound interest formula,
∴ The given statement: The compound interest formula is an exponential growth function is true.
(b)
To check the given statement: “The compound interest formula is an exponential decay function” is true or false
(b)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
False.
Explanation of Solution
Given Information: The compound interest formula is
Formula used:
An exponential decay can be modeled by the function
The base b is called decay factor.
The compound interest formula,
∴ The given statement: The compound interest formula is an exponential decay function is false
(c)
To check the given statement: “For the CD from Bank West,
(c)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
False.
Explanation of Solution
Given Information: Details of the West Bank is shown below:
Bank | CD Length | AnnualInterest Rate | Frequency of compounding |
Bank West | 6 years | 3.8 | Quarterly |
In the formula for compound interest,
For Bank West, it is given that the interest is compounded quarterly.
∴ The number of times interest applied per time period is 4
That is,
∴The given statement: For the CD from Bank West,
(d)
To check the given statement: “For the CD from First Bank,
(d)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
True.
Explanation of Solution
Given Information: Details of the First Bank is shown below:
Bank | CD Length | AnnualInterest Rate | Frequency of compounding |
First Bank | 5 years | 4.3 | Monthly |
In the formula for compound interest,
For the First Bank it is given that the interest is compounded monthly and time period of the CD is 5 years.
That is,
∴
∴ The given statement: For the CD from Bank First
(e)
To check the given statement: “The growth /decay factor for the CD from Bank West is
(e)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
True.
Explanation of Solution
Given Information: Details of the West Bank is shown below:
Bank | CD Length | AnnualInterest Rate | Frequency of compounding |
Bank West | 6 years | 3.8 | Quarterly |
The compound interest formula,
n represents number of times interest applied per time period and t represents the time period.
For Bank West, it is given that the interest is compounded quarterly and time period is 6 years.
∴ The growth factor
=
∴ The given statement: The growth /decay factor for the CD from Bank West is
(f)
To check the given statement: “The growth /decay factor for the CD from Bank West is
(f)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
False.
Explanation of Solution
From part (e) it has been find that the growth factor
for the CD from Bank West is
∴ The given statement the growth /decay factor for the CD from Bank West is
(g)
To check the given statement: “The growth /decay factor for the CD from Bank First is
(g)
![Check Mark](/static/check-mark.png)
Answer to Problem 1MP
Explanation of Solution
Given Information: Details of the First Bank is shown below:
Bank | CD Length | AnnualInterest Rate | Frequency of compounding |
First Bank | 5 years | 4.3 | Monthly |
For the First bank:
Growth Factor for the CD from First Bank =
=
=
Clearly the Growth Factor for the CD from First Bank is not equal to
∴The given statement: “The growth /decay factor for the CD from Bank First is
Chapter 7 Solutions
High School Math 2015 Common Core Algebra 1 Student Edition Grade 8/9
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