Question

Jim is opening an interest-accruing checking account which compounds interest monthly. The amount in the account, in dollars, after t years, is shown by the following expression.

3400(1.06\^12t
Which statement below best describes the base, 1.06?
O the amount of the initial deposit
O the rate at which the account is increasing
O the number of times the account has compounded since it was opened
O the amount of the yearly earnings

Answer 1

The base, 1.06, in the given expression represents the rate at which the account is increasing.

Step-by-step explanation:

The base, 1.06, in the given expression represents the rate at which the account is increasing. In this case, the interest is compounded monthly at a rate of 6%, which is equivalent to 0.06. The base, 1.06, represents the multiplier applied to the original amount each month, resulting in the growth of the account balance over time.