Noun | lecture 1 | Ram Mohan Srivastava | Banking Exams | SSC | Railway | CLASS 12 | UPSSSC | UPSC

Student in a finance class surveyed 20 percent of the account holders at Docven Bank to determine whether the bank's "Stock Market Special" savings account actually paid account holders the promised 10 percent annual interest rate. The scatterplot above shows the data the students collected from account holders about how long ago they opened their accounts and their current balances. The students calculated a lone of best fit with the equation y = 120(1+(.08)/(12))^(12x), whihc means that the bank was actually paying account holders only an 8 percent annual interest rate. Which of the following best explains how the number 120 in the equation relates to the scatterplot?