100 POINTS

Task 2: Investments

The formula to find the amount in an account, A, that has an interest rate, r, that compounds n times per year and has a starting balance of P after t years is .

If the interest is compounded yearly, then n = 1 and th e interest rate, r, represents the annual interest. When the interest is compounded monthly, then n = 12 but r is still the annual interest.



A.If you were given the equation A=P(1+r)^t how often is the interest compounded?

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B. If you were given the equation1.17 , what would the annual interest rate be?

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C. What would need to change about the equation in part b for it to represent an account that is compounded monthly?

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D.Use the properties of exponents to rewrite the equation given in part b so that it represents an account that is compounded monthly.

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E. What would be the approximate monthly interest rate that is equivalent to the annual interest rate represented in the equation given in part b?

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