Math 62 - 1.5 exponential growth and 1.6 logarithms. 4 1.5 Exponential growth an

Question

Math 62 - 1.5 exponential growth and 1.6 logarithms.

4 1.5 Exponential growth and 1.6 logarithms The following formulas describing exponential growth and in particular financial growth might be useful. Assuming that P eginning principal t number of periods of compounding per ycar n number of years 2 carning annual interest rate F future valuc Fixed Periods of Compounding per year If continuous F P.(e)ni i?t-73 l. How long will it take to triple an initial investment earning 4.75% annual interest that is continuously 2. What amount presently must be invested earning 5.25% compounded daily for the next 10 years so that it will grow up to be worth $25,000 10 years from now?

Explanation / Answer

1. F = P (e)n.i

3P = P (e)0.0475n

3 = e0.0475n

n =ln 3/0.0475

n= 23.13

2. F = P(1+i/n)t.n

25000= P(1+0.0525/365)365*10

25000 =P(1.69)

P = 14792.90

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