Compound and Continuous Interest

Page 1


112. Investigate the behavior of the functions g1(x) ! xe , g2(x) ! x2e x, and g3(x) ! x3e x as x S " and as x S #", and find any horizontal asymptotes. Generalize to functions of the form gn(x) ! x ne x, where n is any positive integer. 113. Explain why the graph of an exponential function cannot be the graph of a polynomial function. 114. Explain why the graph of an exponential function cannot be the graph of a rational function.

APPLICATIONS* ★115. FINANCE A couple just had a new child. How much should

they invest now at 8.25% compounded daily to have $40,000 for the child’s education 17 years from now? Compute the answer to the nearest dollar. ★116.

FINANCE A person wishes to have $15,000 cash for a new

car 5 years from now. How much should be placed in an account now if the account pays 9.75% compounded weekly? Compute the answer to the nearest dollar. 117. MONEY GROWTH If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-


113. Explain why the graph of an exponential function cannot be the graph of a polynomial function. 114. Explain why the graph of an exponential function cannot be the graph of a rational function.

APPLICATIONS* ★115. FINANCE A couple just had a new child. How much should

they invest now at 8.25% compounded daily to have $40,000 for the child’s education 17 years from now? Compute the answer to the nearest dollar. ★116.

FINANCE A person wishes to have $15,000 cash for a new

car 5 years from now. How much should be placed in an account now if the account pays 9.75% compounded weekly? Compute the answer to the nearest dollar. 117. MONEY GROWTH If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-

ing 8% compounded daily and, at the same time, $5,000 is deposited into an account earning 5% compounded daily, will the first account be worth more than the second? If so, when?


APPLICATIONS* ★115. FINANCE A couple just had a new child. How much should

they invest now at 8.25% compounded daily to have $40,000 for the child’s education 17 years from now? Compute the answer to the nearest dollar. ★116.

FINANCE A person wishes to have $15,000 cash for a new

car 5 years from now. How much should be placed in an account now if the account pays 9.75% compounded weekly? Compute the answer to the nearest dollar. 117. MONEY GROWTH If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-

ing 8% compounded daily and, at the same time, $5,000 is deposited into an account earning 5% compounded daily, will the first account be worth more than the second? If so, when? ★120.

FINANCE If $4,000 is deposited into an account earning

9% compounded weekly and, at the same time, $6,000 is deposited into an account earning 7% compounded weekly,


★115. FINANCE A couple just had a new child. How much should

they invest now at 8.25% compounded daily to have $40,000 for the child’s education 17 years from now? Compute the answer to the nearest dollar. ★116.

FINANCE A person wishes to have $15,000 cash for a new

car 5 years from now. How much should be placed in an account now if the account pays 9.75% compounded weekly? Compute the answer to the nearest dollar. 117. MONEY GROWTH If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-

ing 8% compounded daily and, at the same time, $5,000 is deposited into an account earning 5% compounded daily, will the first account be worth more than the second? If so, when? ★120.

FINANCE If $4,000 is deposited into an account earning

9% compounded weekly and, at the same time, $6,000 is deposited into an account earning 7% compounded weekly, *Round monetary amounts to the nearest cent unless specified otherwise. In all problems involving interest that is compounded daily, assume a 365-day year.


now if the account pays 9.75% compounded weekly? Compute the answer to the nearest dollar. 117. MONEY GROWTH If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-

ing 8% compounded daily and, at the same time, $5,000 is deposited into an account earning 5% compounded daily, will the first account be worth more than the second? If so, when? ★120.

FINANCE If $4,000 is deposited into an account earning

9% compounded weekly and, at the same time, $6,000 is deposited into an account earning 7% compounded weekly, *Round monetary amounts to the nearest cent unless specified otherwise. In all problems involving interest that is compounded daily, assume a 365-day year.


be in the account at the end of (A) 6.25 years? (B) 17 years? 118. MONEY GROWTH If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in the account at the end of (A) 5.5 years? (B) 12 years? ★119.

FINANCE If $3,000 is deposited into an account earn-

ing 8% compounded daily and, at the same time, $5,000 is deposited into an account earning 5% compounded daily, will the first account be worth more than the second? If so, when? ★120.

FINANCE If $4,000 is deposited into an account earning 9% compounded and, at the Functions same time, $6,000 S E C T I O Nweekly 5–1 Exponential 469is

deposited into an account earning 7% compounded weekly, will the first account be worth more than the second? If so, when?

*Round monetary amounts to the nearest cent unless specified ★otherwise. 121. FINANCE Will an involving investment of $10,000 at 8.9% comIn all problems interest that is compounded pounded dailya ever be worth daily, assume 365-day year. more at the end of any quarter than

an investment of $10,000 at 9% compounded quarterly? Explain.

★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at


S E C T I O N 5–1

Exponential Functions

469

will the first account be worth more than the second? If so, when? ★121.

FINANCE Will an investment of $10,000 at 8.9% com-

pounded daily ever be worth more at the end of any quarter than an investment of $10,000 at 9% compounded quarterly? Explain. ★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at

maturity 10 years from now. How much should you pay for the note now if the note gains value at a rate of 9% compounded continuously? ★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the


x

, ", to ve

x

, ", cve

ot

ot

ld or to

w nt te

S E C T I O N 5–1

Exponential Functions

469

will the first account be worth more than the second? If so, when? ★121.

FINANCE Will an investment of $10,000 at 8.9% com-

pounded daily ever be worth more at the end of any quarter than an investment of $10,000 at 9% compounded quarterly? Explain. ★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at

maturity 10 years from now. How much should you pay for the note now if the note gains value at a rate of 9% compounded continuously? ★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the note now if the note gains value at a rate of 10% compounded continuously?

125. MONEY GROWTH Barron’s, a national business and financial weekly, published the following “Top Savings Deposit Yields” for 212 -year certificate of deposit accounts: Gill Savings Richardson Savings and Loan

8.30% (CC) 8.40% (CQ)


so, when? ★121.

FINANCE Will an investment of $10,000 at 8.9% com-

pounded daily ever be worth more at the end of any quarter than an investment of $10,000 at 9% compounded quarterly? Explain. ★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at

maturity 10 years from now. How much should you pay for the note now if the note gains value at a rate of 9% compounded continuously? ★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the note now if the note gains value at a rate of 10% compounded continuously?

125. MONEY GROWTH Barron’s, a national business and financial weekly, published the following “Top Savings Deposit Yields” for 212 -year certificate of deposit accounts: Gill Savings Richardson Savings and Loan USA Savings

8.30% (CC) 8.40% (CQ) 8.25% (CD)

where CC represents compounded continuously, CQ compounded quarterly, and CD compounded daily. Compute the


an investment of $10,000 at 9% compounded quarterly? Explain. ★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at

maturity 10 years from now. How much should you pay for the note now if the note gains value at a rate of 9% compounded continuously? ★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the note now if the note gains value at a rate of 10% compounded continuously?

125. MONEY GROWTH Barron’s, a national business and financial weekly, published the following “Top Savings Deposit Yields” for 212 -year certificate of deposit accounts: Gill Savings Richardson Savings and Loan USA Savings

8.30% (CC) 8.40% (CQ) 8.25% (CD)

where CC represents compounded continuously, CQ compounded quarterly, and CD compounded daily. Compute the value of $1,000 invested in each account at the end of 212 years. 126. MONEY GROWTH Refer to Problem 125. In another issue of Barron’s, 1-year certificate of deposit accounts included: Alamo Savings

8.25% (CQ)


S #", o funcpositive cannot cannot

should 000 for swer to

r a new account ompute

nt payey will

ccount ey will

t earn,000 is daily, econd?

earning 000 is weekly,

★122.

FINANCE A sum of $5,000 is invested at 13% com-

pounded semiannually. Suppose that a second investment of $5,000 is made at interest rate r compounded daily. Both investments are held for 1 year. For which values of r, to the nearest tenth of a percent, is the second investment better than the first? Discuss. ★123.

PRESENT VALUE A promissory note will pay $30,000 at

maturity 10 years from now. How much should you pay for the note now if the note gains value at a rate of 9% compounded continuously? ★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the note now if the note gains value at a rate of 10% compounded continuously?

125. MONEY GROWTH Barron’s, a national business and financial weekly, published the following “Top Savings Deposit Yields” for 212 -year certificate of deposit accounts: Gill Savings Richardson Savings and Loan USA Savings

8.30% (CC) 8.40% (CQ) 8.25% (CD)

where CC represents compounded continuously, CQ compounded quarterly, and CD compounded daily. Compute the value of $1,000 invested in each account at the end of 212 years. 126. MONEY GROWTH Refer to Problem 125. In another issue of Barron’s, 1-year certificate of deposit accounts included: Alamo Savings Lamar Savings

8.25% (CQ) 8.05% (CC)

Compute the value of $10,000 invested in each account at the end of 1 year. 127. FINANCE Suppose $4,000 is invested at 11% compounded weekly. How much money will be in the account in (A) 12 year? (B) 10 years? Compute answers to the nearest cent. 128. FINANCE Suppose $2,500 is invested at 7% compounded


ould for er to

new ount pute

paywill

ount will

arn0 is aily, nd?

ning 0 is kly,

★124.

PRESENT VALUE A promissory note will pay $50,000 at

maturity 512 years from now. How much should you pay for the note now if the note gains value at a rate of 10% compounded continuously?

125. MONEY GROWTH Barron’s, a national business and financial weekly, published the following “Top Savings Deposit Yields” for 212 -year certificate of deposit accounts: Gill Savings Richardson Savings and Loan USA Savings

8.30% (CC) 8.40% (CQ) 8.25% (CD)

where CC represents compounded continuously, CQ compounded quarterly, and CD compounded daily. Compute the value of $1,000 invested in each account at the end of 212 years. 126. MONEY GROWTH Refer to Problem 125. In another issue of Barron’s, 1-year certificate of deposit accounts included: Alamo Savings Lamar Savings

8.25% (CQ) 8.05% (CC)

Compute the value of $10,000 invested in each account at the end of 1 year. 127. FINANCE Suppose $4,000 is invested at 11% compounded weekly. How much money will be in the account in (A) 12 year? (B) 10 years? Compute answers to the nearest cent. 128. FINANCE Suppose $2,500 is invested at 7% compounded quarterly. How much money will be in the account in (A) 34 year? (B) 15 years? Compute answers to the nearest cent.


USA Savings

8.25% (CD)

where CC represents compounded continuously, CQ compounded quarterly, and CD compounded daily. Compute the value of $1,000 invested in each account at the end of 212 years. 126. MONEY GROWTH Refer to Problem 125. In another issue of Barron’s, 1-year certificate of deposit accounts included: Alamo Savings Lamar Savings

8.25% (CQ) 8.05% (CC)

Compute the value of $10,000 invested in each account at the end of 1 year. 127. FINANCE Suppose $4,000 is invested at 11% compounded weekly. How much money will be in the account in (A) 12 year? (B) 10 years? Compute answers to the nearest cent. 128. FINANCE Suppose $2,500 is invested at 7% compounded quarterly. How much money will be in the account in (A) 34 year? (B) 15 years? Compute answers to the nearest cent.


value of $1,000 invested in each account at the end of 22 years. 126. MONEY GROWTH Refer to Problem 125. In another issue of Barron’s, 1-year certificate of deposit accounts included: Alamo Savings Lamar Savings

8.25% (CQ) 8.05% (CC)

Compute the value of $10,000 invested in each account at the end of 1 year. 127. FINANCE Suppose $4,000 is invested at 11% compounded weekly. How much money will be in the account in (A) 12 year? (B) 10 years? Compute answers to the nearest cent. 128. FINANCE Suppose $2,500 is invested at 7% compounded quarterly. How much money will be in the account in (A) 34 year? (B) 15 years? Compute answers to the nearest cent.


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.