5
advanced-math

An account earns 0.5% interest per month. What is the monthly growth factor?

A

1.5

B

1.05

C

1.005

D

0.005

Correct Answer: C

Choice C is the correct answer. Convert small percentage to decimal carefully.

  1. Identify Rate: r=0.5%=0.005r = 0.5\% = 0.005.
  2. Calculate Factor: b=1+r=1+0.005=1.005b = 1 + r = 1 + 0.005 = 1.005.

💡 Strategic Tip: Move the decimal point two places left for percentage. 0.5→0.0050.5 \to 0.005.

Choice A is incorrect because it represents 50%. Choice B is incorrect because it represents 5%.

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