Answer:
B. [tex]120,000(1.005)^{12t}[/tex]
Step-by-step explanation:
We are given that,
The expression representing the amount of the loan with 6% interest rate is,
Loan amount = [tex]120,000(1.06)^t[/tex] = [tex]120,000(1+0.06)^t[/tex]
Now, we want to find the amount which represents the loan being compounded monthly.
Thus, we have that,
Loan amount compounded monthly = [tex]120,000(1+\frac{0.06}{12})^{12t}[/tex]
i.e. Loan amount compounded monthly = [tex]120,000(1+0.005)^{12t}[/tex]
i.e. Loan amount compounded monthly = [tex]120,000(1.005)^{12t}[/tex]
Hence, the expression representing the monthly interest rate on the loan is [tex]120,000(1.005)^{12t}[/tex].
So, option B is correct.
