Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
6th Edition
ISBN: 9781337111348
Author: Bruce Crauder, Benny Evans, Alan Noell
Publisher: Cengage Learning
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Chapter 4.2, Problem 23E

Reminder Round all answers to two decimal places unless otherwise indicated.

Continuous Compounding This is a continuation of Exercise 22. In this exercise, we examine the relationship between APR and the APY when interest is compounded continuously-in other words, at every instant. We will see by means of an example that the relationship is

Yearly growth factor = e APR , ( 4.1 )

and so

APY = e APR 1 ( 4.2 )

if both the APR and the APY are in decimal form and interest is compounded continuously. Assume that the APR is 10 % , or 0.1 as a decimal.

a. The yearly growth factor for continuous compounding is just the limiting value of the function given by the formula in part b of Exercise 22. Find that limiting value to four decimal places.

b. Compute e APR with an APR of 0.1 (as a decimal).

c. Use your answers to parts a and b to verify that Equation (4.1) holds in the case where the APR is 10 % .

Note: On the basis of part a, one conclusion is that there is a limit to the increase in the yearly growth factor (and hence in the APY) as the number of compounding periods increases. We might have expected the APY to increase without limit for more and more frequent compounding.

22. APR and APY Recall that financial institutions sometimes report the annual interest rate that they offer on investments as the APR, often called the nominal interest rate. To indicate how an investment will actually grow, they advertise the annual percentage yield, or APY. In mathematical terms, this is the yearly percentage growth rate for the exponential function that models the account balance. In this exercise and the next, we study the relationship between the APR and the APY. We assume that the APR is 10%. or 0.1 as a decimal.

To determine the APY when we know the APR, we need to know how often interest is compounded. For example, suppose for the moment that interest is compounded twice a year. Then to say that the APR is 10% means that in half a year, the balance grows by 10 2 % (or 5%). In other words, the 1 2 -year percentage growth rate is 0.1 2 (as a decimal). Thus, the 1 2 -year growth factor is 1 + 0.1 2 . To find the yearly growth factor, we need to perform a unit conversion: One year is 2 half-year periods, so the yearly growth factor is ( 1 + 0.1 2 ) 2 or 1.1025 .

a. What is the yearly growth factor if interest is compounded four times a year?

b. Assume that interest is compounded n times each year. Explain why the formula for the yearly growth factor is

( 1 + 0.1 n ) n .

c. What is the yearly growth factor if interest is compounded daily? Give your answer to four decimal places.

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Chapter 4 Solutions

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)

Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Reminder Round all answers to two decimal places...Ch. 4.1 - Exponential Growth with Given Initial Value and...Ch. 4.1 - Exponential Decay with Given Initial Value and...Ch. 4.1 - Exponential GrowthAn amount A is initially 10. To...Ch. 4.1 - Exponential GrowthAn amount A is initially 8. To...Ch. 4.1 - Exponential DecayAn amount A is initially 7. To...Ch. 4.1 - Prob. 6SBECh. 4.1 - Exponential ChangeAn amount A is initially 8. To...Ch. 4.1 - Exponential changes The initial amount is 4, To...Ch. 4.1 - Function Value from Initial Value and Growth...Ch. 4.1 - Function Value from Initial Value and Growth...Ch. 4.1 - Finding the Growth Factor Suppose that f is an...Ch. 4.1 - Exponential Decay Is the graph of exponential...Ch. 4.1 - Exponential Decay What is the concavity of a graph...Ch. 4.1 - Exponential Growth What is the concavity of a...Ch. 4.1 - Rate of Change What can be said about the rate of...Ch. 4.1 - Exponential Growth Is the graph of exponential...Ch. 4.1 - Changing Units A certain quantity has a yearly...Ch. 4.1 - Changing Units A certain quantity has a yearly...Ch. 4.1 - Prob. 19SBECh. 4.1 - Changing UnitsA certain quantity has a yearly...Ch. 4.1 - Prob. 21SBECh. 4.2 - TEST YOUR UNERSTANDING | FOR EXAMPLE 4.4 Suppose...Ch. 4.2 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.5 There...Ch. 4.2 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.6 You get...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Prob. 14ECh. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Prob. 17ECh. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Reminder Round all answers to two decimal places...Ch. 4.2 - Making ModelsIn Exercise S-1 through S-4, make an...Ch. 4.2 - Prob. 2SBECh. 4.2 - Making ModelsIn Exercise S-1 through S-4, make an...Ch. 4.2 - Prob. 4SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Prob. 12SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Prob. 18SBECh. 4.2 - Prob. 19SBECh. 4.2 - Prob. 20SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Prob. 22SBECh. 4.2 - Prob. 23SBECh. 4.2 - Prob. 24SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Prob. 26SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.2 - Prob. 28SBECh. 4.2 - Round each percentage increase or decrease that...Ch. 4.3 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.7 The...Ch. 4.3 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.8 A snake...Ch. 4.3 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.9 A...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Prob. 17ECh. 4.3 - Reminder Round all answers to two decimal places...Ch. 4.3 - Prob. 19ECh. 4.3 - Prob. 20ECh. 4.3 - Finding exponential formula In Exercise S-1 trough...Ch. 4.3 - Prob. 2SBECh. 4.3 - Finding an Exponential formula In Exercise S-1...Ch. 4.3 - Prob. 4SBECh. 4.3 - Finding an Exponential formula In Exercise S-1...Ch. 4.3 - Finding an Exponential formula In Exercise S-1...Ch. 4.3 - Prob. 7SBECh. 4.3 - Prob. 8SBECh. 4.3 - Prob. 9SBECh. 4.3 - Prob. 10SBECh. 4.3 - Testing Exponential DataIn Exercises S-8 through...Ch. 4.3 - Testing Exponential DataIn Exercises S-8 through...Ch. 4.3 - Prob. 13SBECh. 4.3 - Prob. 14SBECh. 4.3 - Prob. 15SBECh. 4.3 - Testing Exponential DataIn Exercises S-8 through...Ch. 4.3 - Prob. 17SBECh. 4.3 - Prob. 18SBECh. 4.3 - Prob. 19SBECh. 4.3 - Prob. 20SBECh. 4.3 - Prob. 21SBECh. 4.4 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.10 The...Ch. 4.4 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.11 A small...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 7ECh. 4.4 - Prob. 8ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 12ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 14ECh. 4.4 - Prob. 15ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 17ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Special Rounding Instructions. For this exercise...Ch. 4.4 - Special Rounding Instructions. For this exercise...Ch. 4.4 - Prob. 21ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 23ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 25ECh. 4.4 - Special Rounding Instructions For this exercise...Ch. 4.4 - Prob. 27ECh. 4.4 - Prob. 28ECh. 4.4 - Round all answers to two decimal places....Ch. 4.4 - Round all answers to two decimal places....Ch. 4.4 - Prob. 3SBECh. 4.4 - Prob. 4SBECh. 4.4 - Prob. 5SBECh. 4.4 - Prob. 6SBECh. 4.4 - Prob. 7SBECh. 4.4 - Prob. 8SBECh. 4.4 - Round all answers to two decimal places....Ch. 4.4 - Prob. 10SBECh. 4.4 - Prob. 11SBECh. 4.4 - Prob. 12SBECh. 4.4 - Prob. 13SBECh. 4.4 - Prob. 14SBECh. 4.4 - Prob. 15SBECh. 4.4 - Round all answers to two decimal places. Using...Ch. 4.4 - Prob. 17SBECh. 4.4 - Round all answers to two decimal places. Using...Ch. 4.4 - Round all answers to two decimal places. Using...Ch. 4.4 - Prob. 20SBECh. 4.4 - Prob. 21SBECh. 4.4 - Prob. 22SBECh. 4.4 - Prob. 23SBECh. 4.4 - Prob. 24SBECh. 4.4 - Prob. 25SBECh. 4.4 - Prob. 26SBECh. 4.4 - Prob. 27SBECh. 4.4 - Round all answers to two decimal places. Linear or...Ch. 4.5 - TEST YOUR UNDESTANDING | FOR EXAMPLE 4.12 On...Ch. 4.5 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.13 The...Ch. 4.5 - TEST YOUR UNDERSTANDING | FOR EXAMPLE 4.14 If...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Prob. 8ECh. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Weight Gain Zoologists have studied the daily rate...Ch. 4.5 - Reaction Time For certain decisions, the time it...Ch. 4.5 - Age of Haddock The age T, in years, of a haddock...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Reminder Round all answers to two decimal places...Ch. 4.5 - Prob. 18ECh. 4.5 - Prob. 19ECh. 4.5 - Prob. 20ECh. 4.5 - Prob. 21ECh. 4.5 - Prob. 22ECh. 4.5 - Prob. 23ECh. 4.5 - Prob. 24ECh. 4.5 - Prob. 25ECh. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Richter Scale Exercise S-1 through S-6 use...Ch. 4.5 - Prob. 7SBECh. 4.5 - The Decibel scale Exercise S-7 through S-10 refer...Ch. 4.5 - Prob. 9SBECh. 4.5 - Prob. 10SBECh. 4.5 - Calculating Common LogarithmsIn Exercises S-11...Ch. 4.5 - Prob. 12SBECh. 4.5 - Prob. 13SBECh. 4.5 - Prob. 14SBECh. 4.5 - Prob. 15SBECh. 4.5 - Prob. 16SBECh. 4.5 - Prob. 17SBECh. 4.5 - Prob. 18SBECh. 4.5 - Prob. 19SBECh. 4.5 - Prob. 20SBECh. 4.5 - Prob. 21SBECh. 4.5 - Prob. 22SBECh. 4.5 - Solving Logarithmic Equations In Exercises S-22...Ch. 4.5 - Prob. 24SBECh. 4.5 - Prob. 25SBECh. 4.5 - Prob. 26SBECh. 4.5 - Prob. 27SBECh. 4.5 - Prob. 28SBECh. 4.5 - How the Logarithm IncreasesIf logx=8.3 and...Ch. 4.5 - Prob. 30SBECh. 4.5 - Prob. 31SBECh. 4.5 - Prob. 32SBECh. 4.5 - Prob. 33SBECh. 4.5 - Logarithmic Regression Logarithmic regression...Ch. 4.5 - Prob. 35SBECh. 4.5 - Prob. 36SBECh. 4.5 - Prob. 37SBECh. 4.CR - Prob. 1CRCh. 4.CR - Prob. 2CRCh. 4.CR - Prob. 3CRCh. 4.CR - Prob. 4CRCh. 4.CR - Prob. 5CRCh. 4.CR - Prob. 6CRCh. 4.CR - Prob. 7CRCh. 4.CR - ReminderRound all answers to two decimal places...Ch. 4.CR - Prob. 9CRCh. 4.CR - Prob. 10CRCh. 4.CR - Prob. 11CRCh. 4.CR - Reminder Round all answers to two decimal places...Ch. 4.CR - Prob. 13CRCh. 4.CR - Prob. 14CRCh. 4.CR - Prob. 15CRCh. 4.CR - Prob. 16CRCh. 4.FR - Reminder Round all answers to two decimal places...Ch. 4.FR - Reminder Round all answers to two decimal places...Ch. 4.FR - Prob. 3ECh. 4.FR - Prob. 4ECh. 4.FR - Prob. 5ECh. 4.FR - Prob. 6ECh. 4.FR - Prob. 7ECh. 4.FR - Prob. 8ECh. 4.FR - Prob. 9ECh. 4.FR - Prob. 10ECh. 4.FR - Prob. 11ECh. 4.FR - Prob. 12ECh. 4.FR - Prob. 13ECh. 4.FR - Prob. 14ECh. 4.FR - Prob. 15ECh. 4.FR - Prob. 16ECh. 4.FR - Prob. 17ECh. 4.FR - Prob. 18ECh. 4.FR - Prob. 19ECh. 4.FR - Prob. 20ECh. 4.FR - Prob. 21ECh. 4.FR - Prob. 22ECh. 4.FR - Prob. 23ECh. 4.FR - Prob. 24ECh. 4.FR - Prob. 25ECh. 4.FR - Illustrative Applications Exercises 23 through 26...
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