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Examples of exponential and continuously compounded interest

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1. Create and answer two exponential model questions: Formula y = ab^x

2. Create and answer two continuously compounded interest questions: Formula A = Pe ^r*t

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Solution Summary

This is a step by step solution which includes two examples of exponential model and continuously compounded interest each.

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Note: Please see the attached file for problems and answers in MS word.

Problem 1. Create and answer two exponential model questions: Formula y = ab^x

Question 1A: The population of a town P(in thousands) for x years after 1990 is given by the function P(x) = 100(1.2)^x
Find the population of the town in the year 2000. Round the answer to nearest thousands.

Solution 1A:
x = 2000 - 1990 = 10 years
So the population in the year 2000 will be

P = 100(1.2)^10
P = 100 x 6.19173642 = 619.173642
The population of the town will be 619000 in the year 2000.

Question 1B: Find the exponential function y = ...

Solution provided by:
Sandhya Sharma, MSc
Education
  • BSc, Meerut University
  • MSc, Meerut University
  • MPhil, Institute of Advanced Studies
  • MSc, AIT
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