Question

question 2 (1 point)
choose the statement that best supports the change factor in your equations.
a (.87) would be an appropriate change factor since we are paying off 13% each year.
b (0.13) is the appropriate change factor since the debt increases by 13% each year.
c (1.13) is the appropriate change factor since the balance is not being paid annually and will continue to grow.
d i guessed and i dont understand

Explanation:

• For option a: A 13% annual payoff means 87% ($1 - 0.13 = 0.87$) of the debt remains each year, so 0.87 is a valid decay factor for decreasing debt.
• For option b: 0.13 would only represent the portion paid off, not the change factor for the total debt balance.
• For option c: 1.13 is a growth factor (for 13% increase), which does not match a payoff scenario.
• Option d is not a valid academic answer.

Answer:

a. (.87) would be an appropriate change factor since we are paying off 13% each year.