The Simple Interest on an Investment Is Directly Proportional to the Amount

question 29

Multiple Choice

The simple interest on an investment is directly proportional to the amount of the investment.By investing $6000 in a certain certificate of deposit,you obtained an interest payment of $276.00 after 1 year.Determine a mathematical model that gives the interest,I ,for this CD after 1 year in terms of the amount invested,P.

• A) \(I = ( 0.050 ) P\)
• B) \(I = ( 0.041 ) P\)
• C) \(I = ( 0.049 ) P\)
• D) \(I = ( 0.046 ) P\)
• E) \(I = ( 0.044 ) P\)

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Definitions:

Elastic Demand

A situation in which the quantity demanded of a good or service significantly changes in response to a change in price.

Close Substitutes

Products or services that can easily replace one another in usage or consumption.

Demand Curves

Graphs showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping.

Price Elasticity of Demand

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