Use the Formula A $$A = P \left( 1 + \frac { r } { n } \right) ^ { n t } \text { or } A = P e ^ { r t } \text { to solve. }$$

question 34

Multiple Choice

Use the formula A $$A = P \left( 1 + \frac { r } { n } \right) ^ { n t } \text { or } A = P e ^ { r t } \text { to solve. }$$
-How long it will take $4000 to grow to $6000 if the money is invested 4% interest compounded semiannually. Round to the nearest whole year.

• A) 11 years
• B) 1 year
• C) 20 years
• D) 10 years

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Definitions:

Substitution Effect

The substitution effect is a concept in economics that describes how consumers change their consumption patterns in response to changes in the prices of goods, opting for cheaper alternatives when prices increase.

Income

Money received, especially on a regular basis, for work, through investments, or from any other source.

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.