A well-balanced stock market portfolio will often experience an exponential growth. A particular investor with a well-balanced stock market portfolio records the portfolio balance every month, in thousands of dollars, from the date of investment. The roughly exponential growth can be transformed to a linear model by plotting the natural log of the balances versus time, in months, where t = 0 represents the date the money was invested. The linear regression equation for the transformed data is   Using this equation, what is the predicted balance of the portfolio after 2 years (24 months)? (A) $5,654 (B) $6,798 (C) $285,431 (D) $896,053 (E) $948,464

Algebra: Structure And Method, Book 1
(REV)00th Edition
ISBN:9780395977224
Author:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Publisher:Richard G. Brown, Mary P. Dolciani, Robert H. Sorgenfrey, William L. Cole
Chapter7: Applying Fractions
Section7.8: Work Problems
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A well-balanced stock market portfolio will often experience an exponential growth. A particular investor with a well-balanced stock market portfolio records the portfolio balance every month, in thousands of dollars, from the date of investment. The roughly exponential growth can be transformed to a linear model by plotting the natural log of the balances versus time, in months, where t = 0 represents the date the money was invested. The linear regression equation for the transformed data is

 

Using this equation, what is the predicted balance of the portfolio after 2 years (24 months)?

  • (A) $5,654
  • (B) $6,798
  • (C) $285,431
  • (D) $896,053
  • (E) $948,464
In (balance)= 5.550 + 0.052t.
Transcribed Image Text:In (balance)= 5.550 + 0.052t.
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