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Loan problems The following initial value problems model the payoff of a loan. In each case, solve the initial value problem, for t ≥ 0, graph the solution, and determine the first month in which the loan balance is zero.
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Calculus: Early Transcendentals, 2nd Edition
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- A universal life policy is issued to a life aged 45. Death benefit is 10,000 and the policyholder pays an annual premium of 200 at the beginning of each year. Expense charges are 30% of first year premium and 5% of renewal premiums. Interest credited is 6% per year and interest assumed in the cost of insurance is 4% per year. Cost of insurance is based on Makeham's mortality, H = 0.01+0.0001(1.05*). The account value at the beginning of the 7th year, before any premium is paid, is 1,500. Calculate, to the nearest integer, the account value at the end of the 7th year.arrow_forwardConsider a savings account with an interest rate of a = 0.1 and an initial investment of y(0) $100. At t=5, a one-time deposit of $50 is made. At t = 10, a one-time withdrawal of $40 is made. Set up and solve an initial value problem for the dollar value y(t) of the account. Sketch the graph of the solution. 1arrow_forwardThe scrap value of a machine at the end of its useful life is given by S(n) = C(1-r)", where C is the original cost, n is the useful life of the machine in years, and r is the constant annual percentage of value lost. Find the scrap value of the following machine. Original cost, $49,000; life, 11 years; annual rate of value lost, 13% S=$ (Round to the nearest cent.)arrow_forward
- Activity no. 11 1. Grace invested P 50,000 at 5%. How much should he invest at 8% to have a total earnings of P 4,900?arrow_forwardINSTRUCTIONS: Solve the following problems. Show a clear and organize solutions for full credits. Use 5 decimal place mantissa. 1. Find the solution of the equation f(x) = In(x+ 2) – e* using bisection method with a-0 and b-0.5. Stop when stop when Ib-al<0.0005.arrow_forwardA. Find how much money there will be in the account after the given number of years. P=$5500 r=8% or 0.08 t=3 years n=4 (quarterly) Using the following equation: A=P(1+r/n)nt A= 5500(1+0.08/4)4(3) This is where I get stuck, my calculations are off and I don't know why.. A=5500(1.08/4)12 A=5500(0.27)12 I cannot figure out why my calculations are off at this point, please help me understand what I am doing incorrectly.arrow_forward
- For a whole life annuity on (x), you are given: The annuity pays 100 per year continuously. Ha+t = 0.02 for t > 0 8 = 0.03 Y is the present value of annuity payments. Calculate SD (Y). Possible Answers A 800 B 1000 C 1200 D 1400 E 1600arrow_forwardWhen you borrow money to buy a house or a car, you pay off the loan in monthly payments, but the interest is always accruing on the outstanding balance. This makes the determination of your monthly payment on a loan more complicated than you might expect. If you borrow P dollars at a monthly interest rate of r (as a decimal) and wish to pay off the note in t months, then your monthly payment M = M(P,r,t) in dollars can be calculated using the following function. M = Pr (1+r)t (1 + r)² - 1 The above function can be rearranged to show the amount of money P = P(M, r, t) as shown below, in dollars, that you can afford to borrow at a monthly interest rate of r (as a decimal) if you are able to make t monthly payments of M dollars. 1 - - - - - (1 - 1 + ²) 1 (1 r) P=Mx Suppose you can afford to pay $300 per month for 3 years. (a) How much money can you afford to borrow for the purchase of a car if the prevailing monthly interest rate is 0.75%? (That is 9% APR.) Express the answer in…arrow_forwardE2arrow_forward
- The stock market investment is loosing its value. The equation is given by ( 4 ) th where P is the principal (the initial value of investment), in dollars, and A A(t) = P 9 is the ammount of investment, in dollars, after t days. If the principal was $200, at what rate, to nearest tenth of a dollars per day, is the investmant deacreasing at 2 days? A) -25.3 $/day B) -26 $/day C) 26 $/day D) 25.3 $/dayarrow_forwardYou are having a dinner catered. You pay a rental fee of $110 for the dining hall, and you pay the caterer $10 for each person who attends the dinner. (a) Suppose you just want to break even. (i) How much should you charge per ticket if you expect 50 people to attend? (Round your answer to the nearest cent.) (ii) Use a formula to express the amount you should charge per ticket as a function of the number of people attending. (Let a be the number of people attending and C the amount in dollars you should charge per person.) (iii) You expect 65 people to attend the dinner. Use your answer to part (ii) to express in functional notation the amount you should charge per ticket, and then calculate that amount. (Round your answer to the nearest cent.) ) = $ per ticket (b) Suppose now that you want to make a profit of $100 from the dinner. Use a formula to express the amount you should charge per ticket as a function of the number of people attending. (Let a be the number of people attending…arrow_forwardThe demand for a car wash is x = 600 − 20p, where the current price is $5. Find the price elasticity of demand ? for this price. ? =arrow_forward
- Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:Cengage