Assignment 16


Problems employing Natural Logs:
1. Evaluate y = A(b)^(kx)
that is y is equal to A (some amount) times b (the base) raised to the k times x power.
a. When A = 30, b = e and k = .05 and x = 0
b. When A = 15,000, b = 1.08, k = 1 and x = 10
c. When A = 120,000 , b = e, k = -.012 and x = 30
d. Find x when A = 3, b = e, k = 2, y = 445.24
e. Find x when A = 180,000 , b = 3 , k = 2 and y = 20,000

2. One very important exponential equation is the compound-interest
formula: found on page 614. It says:

A = P ( 1 + r/n)^(nt)

...where "A" is the ending amount, "P" is the beginning amount (or "principal"), "r" is the interest rate (expressed as a decimal), "n" is the number of compoundings a year, and "t" is the total number of years. The formula calculates the amount (A) owed a person who leaves their money (P) in an account that compounds interest in n times per year, based on a rate of r % Interest per year, for t years of time.

a. Use this formula to calculate the amount of money $10,000 would earn if it were invested at 4.5 percent per year for 8 years in an account that compounded the interest monthly (12 times per year)

b. USe this formula to calculate how long until the investment will have earned a 50% return (that is how long until the investment earns $5000 in interest and is valued at $15,000 total)

c. Use this formula to calulate what interest rate double a person's initial investment in 12 years if the account the account compounded the interest on a monthly basis.