QuestionWrite an exponential function for the yearly interest rate then rewrite the function to find the equivalent monthly interest rate.
APR stands for annual (yearly) interest rate.
12\% APR
Use the variable $t$ for time.
Equation for yearly interest rate: $$A(t)=P(\square)$$
Equation for monthly interest rate: $$A(t)=P(\square)=$$
Monthly interest rate: $\square$

Studdy Solution
The equivalent monthly interest rate is 1\% per month.
The exponential function for the monthly interest rate is:
$$A(t) = P(1 + 0.01)^{12t}$$
Monthly interest rate:
$$0.01$$
The exponential function for the yearly interest rate is:
$$A(t) = P(1.12)^t$$
The exponential function for the monthly interest rate is:
$$A(t) = P(1.01)^{12t}$$
Monthly interest rate:
$$0.01$$