Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 2 - Section 2.1 - Simple Interest - Exercises - Page 133: 35

Answer

Yes, the stock did undergo simple interest changes in the given period.

Work Step by Step

The given graph is a graph of stock value (FV) in time (t). $INT=PVrt$, $FV-PV=PVrt$, $FV=PVrt+PV$, PV is constant (the stock price in January) IF r is constant, then $FV$, as a function of time, is a linear function (with PV as y-intercept and $PV\cdot r$ as slope). The graph given by the problem is clearly not linear in the given period, So, r is not a constant, r is also a function of time (changes with time). Yes, the stock did undergo simple interest changes in the given period.
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