course Mth 173
YOUR ANSWER ->->->-> The space from t = 0 to the clock time found on the horizontal axis is the doubling time. <-<-<-<- Q/A: Desribe how on your graph how you obtained an estimate of the doubling time. <-<-<-<- Q/A: **dividing the equation $5000 * 1.08 ^ ( 2 + doubling time) = 2 * [$5000 * 1.08 ^2] by $5000 we get
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1.08 ^ ( 2 + doubling time) = 2 * 1.08 ^2].
This can be written as
1.08^2 * 1.08^doublingtime = 2 * 1.08^2.
Dividing both sides by 1.08^2 we obtain
1.08^doublingtime = 2.
We can then use trial and error to find the doubling time that works. We get something like 9 years. ** YOUR ANSWER ->->->-> At t = 2, for a $5000 investment at 8%.
dividing the equation $5000 * 1.08 ^ ( 2 + doubling time) = 2 * [$5000 * 1.08 ^2] by $5000 we get
1.08 ^ ( 2 + doubling time) = 2 * 1.08 ^2].
1.08^2 * 1.08^doublingtime = 2 * 1.08^2.
Dividing both sides by 1.08^2 we obtain
1.08^doublingtime = 2.
The doubling time is roughly 9 years. <-<-<-<- Q/A: Write the equation you would solve to determine the doubling time 'doublingTime, starting at t = 2, for a $5000 investment at 8%. <-<-<-<- Q/A: ** the basic equation says that the amount at clock time t, which is P0 * (1+r)^t, is double the original amount P0. The resulting equation is therefore
P0 * (1+r)^t = 2 P0.
Note that this simplifies to
(1 + r)^ t = 2,
and that this result depends only on the interest rate, not on the initial amount P0. ** YOUR ANSWER ->->->-> the original equation shows that the amount at clock time t, which is P0 * (1+r)^t, is double the original amount P0.
P0 * (1+r)^t = 2 P0.
Which can be simplified to
(1 + r)^ t = 2. <-<-<-<- Q/A: query #11. equation for doubling time <-<-<-<- Q/A: ** We find that for the first interest rate, 10%, we have amount = 1(1.10)^t. For the first 4 years the values at t=1,2,3,4 years are 1.10, 1.21, 1.33 and 1.46. By trial and error we find that it will take 7.27 years for the amount to double.
for the second interest rate, 20%, we have amount = 1(1.20)^t. For the first 4 years the values at t=1,2,3,4 years are 1.20, 1.44, 1.73 and 2.07. By trial and error we find that it will take 3.80 years for the amount to double.
Similar calculations tell us that for interest rate 30% we have $286 after 4 years and require 2.64 years to double, and for interest rate 40% we have $384 after 4 years and require 2.06 years to double.
The final 4-year amount increases by more and more with each 10% increase in interest rate.
The doubling time decreases, but by less and less with each 10% increase in interest rate. ** YOUR ANSWER ->->->-> We find that for 10%, we use the equation, 1(1.10)^t. For the first 4 years the values at t=1,2,3,4 years are 1.10, 1.21, 1.33 and 1.46. It takes 7.3 years to double.
for the interest rate, 20%, we use 1(1.20)^t. For the first 4 years the values at t=1,2,3,4 years are 1.20, 1.44, 1.73 and 2.07. It takes 3.80 years to double.
The final 4 year amount increases more each time with each 10% increase in interest rate.
The doubling time decreases, but by less and less with each 10% increase in interest rate. <-<-<-<- Q/A: query #8. Sketch principle vs. time for the first four years with rates 10%, 20%, 30%, 40% <-<-<-<- Q/A: ** The t = 20 value is $200 * 1.1^20 = $1340, approx.
Half the t = 20 value is therefore $1340/2 = $670 approx..
By trial and error or, if you know them, other means we find that the value $670 is reached at t = 12.7, approx..
For example one student found that half of the 20 value is 1345.5/2=672.75, which occurs. between t = 12 and t = 13 (at t = 12 you get $627.69 and at t = 13 you get 690.45).ÿ At 12.75=674.20 so it would probably be about12.72.ÿ
This implies that the principle would double in the interval between t = 12.7 yr and t = 20 yr, which is a period of 20 yr - 12.7 yr = 7.3 yr.
This is consistent with the doubling time we originally obtained, and reinforces the idea that for an exponential function doubling time is the same no matter when we start or end. ** YOUR ANSWER ->->->-> To find t=20, we use the equation $200 * 1.1^20 = $1340.
We can now find half the t = 20 value. $1340/2 = $670.
<-<-<-<- Q/A: At what time t is the principle equal to half its t = 20 value? What doubling time is associated with this result? <-<-<-<- Q/A: ** The growth rate is .10 and the growth factor is 1.10 so the amount function is $200 * 1.10^t.
This graph passes through the y axis at (0, 200), increases at an increasing rate and is asymptotic to the negative x axis.
For t=0, 1, 2 you get p(t) values $200, $220 and $242--you can already see that the rate is increasing since the increases are $20 and $22.
Note that you should know from precalculus the characteristics of the graphs of exponential, polynomial an power functions (give that a quick review if you don't--it will definitely pay off in this course).
$400 is double the initial $200. We need to find how long it takes to achieve this.
Using trial and error we find that $200 * 1.10^tDoub = $400 if tDoub is a little more than 7. So doubling takes a little more than 7 years. The actual time, accurate to 5 significant figures, is 7.2725 years. If you are using trial and error it will take several tries to attain this accuracy; 7.3 years is a reasonable approximation for trail and error.
To reach $300 from the original $200, using amount function $200 * 1.10^t, takes a little over 4.25 years (4.2541 years to 5 significant figures); again this can be found by trial and error.
The amount function reaches $600 in a little over 11.5 years (11.527 years), so to get from $300 to $600 takes about 11.5 years - 4.25 years = 7.25 years (actually 7.2725 years to 5 significant figures). ** YOUR ANSWER ->->->-> The growth rate = .10 and the growth factor = 1.10. We then come up with the equation, $200 * 1.10^t.
$400 is double amount of the initial investment. We find tis by using the formula $200 * 1.10^tdouble = $400. We then find that 7.3 years is the time it takes to double $200 at 10%.
To reach $300 from the initial $200, it takes roughly 4.25 years. <-<-<-<- Q/A: query modeling project #2 #5. $200 init investment at 10%. What are the growth rate and growth factor for this function? How long does it take the principle to double? At what time does the principle first reach $300?"
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