Loading...

#34984

applications

exponential

hard

120 sec

The equation above models the value, $V$ , of an investment $t$ years after it was made. Of the following, which equation best models the value of the investment $m$ months after it was made, where $r_{m}$ is the effective monthly interest rate?

$V = 5000 (1.06)^{t}$

A.

$V = 5000 (1.06)^{m /12}$

B.

$V = 5000 (1.06 \times 12)^{m}$

C.

$V = 5000 (1 + r_{m})^{m}$ , where $r_{m} \approx 0.00487$

D.

$V = 5000 (1 + r_{m})^{m}$ , where $r_{m} = 0.06/12$