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Monday, March 14, 2011

hw #7-7 Exponential Growth APR APY

Read Section 7-8
pg 458-60
#1-13 Odd, 19-21 All, 33-40 Odd

27 comments:

  1. For the test do we have to memorize the Compound interest formula

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  2. The test isn't next class, is it?

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  3. No it is on Friday.

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  4. Please answer Paul's question!

    Do we have to memorize the formula for Compound interest? :(

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  5. I'm kind of fuzzy on this-- would the equation to begin with on #5 on pg 458, be y= 20,000*.05^x? And then substitute 10 for x?

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  6. Also, I don't understand #7.. on pg 458.. The wording is confusing.. And isn't the formula already set to annual?

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  7. For problems like #19, what is "compounded quarterly"? Does that mean I have to make the equation's annual change of rate over 4?

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  8. For #33, I made this equation: y=20,000(1-.02)^6.
    I solved & I got 17,400.. It's the question about the car.. & it asks "should they sell it for $4000?" I'm wondering if my answer is wrong because it is so far from $4000.

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  9. For #34, is there any specific way of finding how many years it will take for the investment to double? Other than lots of trial and error?

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  10. Yes, you have to memorize the formula... I'll be with you in a few minutes on the other questions... got home late... the pi day parties are going on all week... I'm exhausted

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  11. Uh oh.. Ok I'll try.

    And waiting =)

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  12. Look at the parameters (variables) in the formula on page 456... which parameter loses its "impact" if the formula is compounded annually?

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  13. the parameter "n"?

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  14. Dear Fuzzy on Five,

    Your formula is missing a very important parameter... the interest rate need to be 1+.05... not just .05, right?

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  15. Dear Quizzical on Quarterly,

    Look at the formula on pg 456... n is the periods per year... quarterly makes 4, yes?

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  16. Oh got.. It on 5..

    And yes, I am also Quizzical.. But now I gotsk it!

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  17. Dear #7,

    Yup, if the rate is compounded annually, then n=1... n is used as both a divisor and a multiplier, neither of which has an impact if n=1, yes?

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  18. OOOOOH.. I got it! The wording just confused me.

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  19. Dear 33,

    I LOVE that you are questioning your answer, that means that you suspect something is wrong with your math (you are right... something's wrong!).

    The value of the car is decreasing by 20% per year... look at your formula (I'll copy it here):

    y=20,000(1-.02)^6.

    I see a problem... do you??

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  20. Ok I got it.. Is it that I put .02 instead of .2?

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  21. Dear Doubled Over on 34,

    Well, I'd like to think it's not LOTS of trial and error. However, I think you will be surprised at how quickly the money doubles at an 8% rate.

    A graphing calculator would be nice.

    Try the graphing calculator using the formula:

    100*(1+.08)^x

    You'll have to change the graphing window to see the graph (xmin=0, xmax=10, ymin=0, ymax=400, yscale=20)

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  22. For 33.. Well then I think it is! =D

    And for 34, I tried a simple number, like 100, & I got something close to 2, like 2.03, and used it, because 100*(about)2 equals 200, which is 100 doubled. Would that be about right?

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  23. Okay, then for 34 I got 5200.
    =P

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  24. Last question... How do you figure out #40? I'm stumped!

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  25. Oops, I meant for 33 I got 5200.

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  26. We'll talk about #40 in class... can you graph it on the graphing calculator (although we will discuss why the answer is obvious)

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