help:(
In a recent stock market downturn, the value of a $500 stock is decreasing at 1.2% per month. This situation can be modeled by the equation A(t) = 500(0.988)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 whole dollar) after 1 year?

A.)86.5% and $433.00
B.)13.5% and $433.00
C.) 14.4% and $440.00
D.) 98.9% and $494.00

Question

help:( 
 In a recent stock market downturn, the value of a $500 stock is decreasing at 1.2% per month. This situation can be modeled by the equation A(t) = 500(0.988)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 whole dollar) after 1 year?

A.)86.5% and $433.00
B.)13.5% and $433.00
C.) 14.4% and $440.00
D.) 98.9% and $494.00

mathmale · Answer

Note:  That's 1.2% per month.  How would you express that as a decimal fraction?  How many times per year is the decrease in value measured?
You should be using the following equation form:$$A=P(1+r/n)^{nt}$$

mathmale · Answer

$$A = P(1+r/n)^{nt}$$

anonymous · Answer

substitute t=1 so 500(.988)^(12x1) = 432.57 so $433.00 and the devaluation is 1-.865 =13.5% so i believe it is B? @mathmale