Problem : Which investment earns more interest: $10,000 at 6.2% interest compounded quarterly (4 times per year) for twenty years, or $10,000 at 7.5% interest compounded continuously for 15 years?$10,000 at 6.2% interest compounded quarterly (4 times per year) for twenty years: A(t) = 10, 000(1 + )80 34, 229 dollars. $10,000 at 7.5% interest compounded continuously for 15 years: A(t) = 10, 000e1.125 30, 802. The first investment earns more interest.
Problem : How soon will an investment double its value if it is invested at 5% compounded monthly?In about 13.89 years the value of the investment will have doubled.
Problem : A city's population grows at the constant relative rate of 6%. If the original population is 10, 000, how many people are there after ten years?P(t) = 10, 000e.06t.10, 000e.60 18, 221 people.
Problem : The population of a bacteria culture exponentially grows from 2,000 to 20,000 in six hours. What is the constant relative rate of growth?P(t) = P(0)ekt.20, 000 = 2, 000e6k.e6k = 10.k = .3838. The growth rate is approximately 38.38%.
Problem : A substance decays exponentially and has a half-life of 2200 years. A specimen is found containing only 20% of its original amount of the substance. How old is the specimen?M(2200) = M(0)e2200k = M(0).k = - .000315067.M(t) = M(0)e-.000315067t = .2M(0).t = 5100 years. The specimen is about 5100 years old.