Monthly rent at Lake View Apartments has increased annually and is modeled by the exponential equation \( y=2,400(1.04)^{x} \). What is the percent increase per year? \( 104 \% \) \( 40 \% \) \( 4 \% \) \( 0.04 \% \)

The exponential equation \( y = 2,400(1.04)^{x} \) indicates that the rent increases by a factor of \( 1.04 \) each year. This factor reflects a percent increase, specifically \( 4\% \), which is the amount by which the rent grows annually. So, each year, you can expect the rent to increase by 4%! A common mistake in interpreting this equation is confusing the factor with the percent increase. Remember, the base \( 1 + r \) in an exponential model indicates the growth factor, where \( r \) is the growth rate in decimal form. In this case, \( 0.04 \) means a \( 4\% \) increase, not \( 40\% \) or any other figure. Keep this in mind when dealing with similar exponential growth scenarios!