anonymous
  • anonymous
In a recent stock market downturn, the value of a $5,000 stock is decreasing at 2.3% per month. This situation can be modeled by the equation A(t) = 5,000(0.977)12t, where A(t) is the final amount and t is time in years. Assuming the trend continues, what is the equivalent annual devaluation rate of this stock (rounded to the nearest tenth of a percent) and what is it worth (rounded to the nearest ten dollars) after 1 year? 24.4% and $3,780.00 75.6% and $3,780.00 27.6% and $1,380.00 72.4% and $3,620.00
Mathematics
  • Stacey Warren - Expert brainly.com
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SOLVED
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schrodinger
  • schrodinger
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tkhunny
  • tkhunny
Have you considered substituting t = 1 into the equation?
anonymous
  • anonymous
No. I really need someone to talk me through this. I am having a really hard time understanding it @tkhunny
tkhunny
  • tkhunny
There is no talking through to do. Problem statement gives: A(t) = 5,000(0.977)^(12t) Problem statement asks: after 1 year (or t = 1) Substitute and calculate.

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anonymous
  • anonymous
I got 3,781.85 which would either be A or B if I round. But how would I get the percent? @tkhunny
tkhunny
  • tkhunny
Half of 5000 is 2500. Is 3780 more or less than 2500?
anonymous
  • anonymous
Its more than 2500
tkhunny
  • tkhunny
So, the annual rate of discount cannot be as much as 50%, can it?
anonymous
  • anonymous
No, so it would be a?
tkhunny
  • tkhunny
There you go. Think it through. Reason it out. Eliminate silly answers.
anonymous
  • anonymous
Ok thanks!

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