Name ______________ Date ______

Section ______ CW
Aim: How do we graph exponential functions?
Do Now: If you could fold a paper !! times" how many rectangles would you form?
Hint: If you can#t figure it out" follow the instructions $elow and fill in the chart:
1. %old a sheet of paper in half& Notice that the fold line di'ides the paper into (
rectangles&
2. %old the paper in half again& Now how many rectangles are there?
3. %ill in the following ta$le that corresponds to the num$er of rectangles&
)& Determine how to write this with exponents
Number of Folds Number of
Rectangles
Written as exponents
!
(
(
*
)
!!
x
Challenge Question: If you could fold a paper in half !! times" how tall would the paper
$e? +note: ,!! pieces of paper + ream- is a$out ( inches tall-

Classwor: %ill in the ta$le of 'alues that correspond to the function& S.etch the function
in the axis pro'ided& Note: /he graph doesn#t need to $e perfect" as the num$ers will get really $ig&
Function !able of "alues setch
y 0 *x
/ype of
function:
_______
x y
1(
1
!

(
*
)
y
x
y 0 x
*
/ype of
function:
_______
x y
1(
1
!

(
*
)

y
x
y 0 *
x
/ype of
function:
_______
x y
1(
1
!

(
*
)

y
x
Questions
& %or which function do the y 'alues grow the fastest? Why do you thin. that is?
(& What does it mean when we say that something is growing 2exponentially3 ie" the
deficit in our economy is growing at exponential rates?
*& Which of the functions that you graphed do you thin. is an exponential function?
(
Class Notes:
#xponential Function
Definition$e%uation &raph of an exponential function
y
x
Domain Range
'ractice: &raph each function on the axes pro"ided(
& g+x- 0 (
x
and f+x- 0 (x (& g+x- 0 (
x
and f+x- 0 &,
x
y

x
y

x
)( g+x- 0 (
x
and f+x- 0 x
(
y

x
*( g+x, - ) .
x
and f+x, - .
x
y

x
*
Write down an/ obser"ations /ou made from the abo"e graphs(
Application #xample 01: Suppose you put 4!! in a sa'ings account at $an. 5& 6our
friend puts 4!! in a sa'ings account at $an. 5(& Write a function for each e7uation&
Note: In $oth cases the interest rate is ,8
2an 01
6ear 9mount +4-
! !!
!,
( !
* ,
) (!
, (,
2an 0.
6ear 9mount +4-
! !!
!,
( !&(,
* ,&:;
) (&,,
, (:&;*
& <raph each function on a graphing calculator +one at a time-& +put years in = and the
amount of in'estment in =(-& Don#t forget to turn stat plots on and press >oom ?&
(& /a.e the appropriate regression of the function +/o graph the regression" select 'ars" y1
'ars" function" f- & What is the e7uation of the function for $an. 5? _____________
Chec. your ta$le and confirm that you are correct& What is the e7uation of the function
for $an. 5(? _____________Chec. your ta$le and confirm that you are correct&
*& a& %ind the correlation coefficient +ma.e sure your diagnostics is turned on-: ______
$& Why do you thin. this is the correlation coefficient?
What does this correlation coefficient tell you a$out a$out future predictions $ased
on this function?
)& How much money will each person ha'e if they lea'e the money in the account for !
years? *! years?
,& In $oth cases" the interest rate is @8& How is each function different?
3imple 4nterest Compound 4nterest
)
Application #x 0.:
'art 4: Suppose you in'est 4!!! when you turn @ in the stoc.mar.et& /he a'erage
annual percent return +interest- is approximately ?8&
& %ill in the following ta$le to determine how much money you will ha'e if you lea'e
the money for ! years&
yea
r
amount of in'estment
! !!!
!!! A !!!+&!?- 0 !!!+&!?- 0 4!?!
( !?!+&!?- 0 @@&!
*
)
,
;
:
@
?
!
(& <raph:
,
;
)( Figuring out the e%uation of the function:
5ethod 01: /ry to find a pattern from the ta$le& Hint: /he original in'estment is
multiplied $y _______________
6our guess for the e7uation: _____________& /est your guess $y entering the e7uation in
the y0 in the calculator& Chec. the ta$le to see if you are correct&

5ethod 0.: Bse the same method we used for example 5

'art 44: Questions based on the function:
& How much will the in'estment $e if you lea'e it for (! years?
(& Suppose you lea'e the in'estment until you retire at the age of ;,& 9ssuming you are
@" how much money will you ha'e?
*& Challenge: How many years would you ha'e to lea'e your money at this rate in order
to ma.e a million dollars?
)& Super Challenge: Suppose you .ept in'esting another 4!!! each year at the same rate&
How long would you ha'e to .eep in'esting in order to ha'e a million dollars?
'art 444: Answer the following %uestions:
& Were you surprised $y how 7uic.ly 4!!! will grow with compound interest?
Why or why not?
(& Does this change your 'iews on sa'ings and in'esting? ________________
Cxplain:
*& Why is it helpful to .now how to write an exponential function to model the
'arious interest examples?
'art 46: Answer the following %uestion:
9l$ert Cinstein said 2 /he most powerful force in the uni'erse is compound interest3&
What do you thin. he meant?
'art 6: Compound interest
Compounded Deriod per
year
Eates per
period
%unction gi'en an
initial in'estment of
4!!!
9mount of money
you#d ha'e after !
years
9nnually @8
Semi1
9nnually
( @8F( 0 )8
Guarterly )
Honthly (
C'ery ( years F(
C'ery ) years F)
How much money would you need to in'est now if you wanted a million dollars $y the
time you are ;, +@8 interest compounded monthly-?
Compound 4nterest #%uation:
'art 64: 'ractice 'roblems
& Suppose you ha'e 4!!! now and you want to .eep it as sa'ings& Instead of putting it
in the $an. or in'esting" you decide to put it in an en'elope in the $ac. of your soc.
drawer& If the inflation rate is approximately *8 each year" how much will the 4!!! $e
worth in ! years? Determine a function to model the a$o'e situation&
(& a& Hichelle in'ested 4,!!!&!! in a CD with the interest rate of )&@8& +/he )&@8 is
added on once at the end of the CD#s term& If the CD#s term is ( years" how much interest
would she earn after ( years?
$& Suppose she in'ested it in a money mar.et that had a return rate of )&@8 compounded
monthly& How much would she ha'e at the end of ( years?
*& Ieff has one sa'ings account with the interest rate of *&*8" and one money mar.et
account with the interest rate of ,&8 in a $an.& If he deposits 4(!!&!! to the sa'ings
account" and 4@!!&!! to the money mar.et account" how much money will he ha'e after
; years?
'art 64& Eead the following article and answer the 7uestions at the end:
The Power of Long-term Compounding
In 1626, Dutchman Peter Minuit purchased the entire island of Manhattan for $24 from the
Wappinger Indians. In other words, for what it would cost to order a agel and caf! latte at a
midtown hotel toda", Monsieur Minuit owned the entire #ig $pple.
While there are man" outside of %otham that would loo& at neither as a argain, our point is to
demonstrate the power of compound interest o'er time. (ompound interest has een called the
)eighth wonder of the world) and, with the help of the )ninth wonder of the world,) the *P 12(, we
can calculate whether Peter Minuit got a good deal or not.
+'iousl", the &e" 'ariale to determine the answer is interest rate that we appl" to the $24. +r
what we could ha'e earned in an alternati'e in'estment.
,he difference etween a -. return and a 1/. return isn0t a simple douling ut a compounding
that ecomes staggering o'er time. If the $24 was in'ested at -. interest o'er the past 122 "ears
it would ha'e grown to $2.1 illion toda", impl"ing a good price gi'en 3oc&efeller (enter sold for
$1.4 illion in 2///.
$t a 1/. return howe'er, the $24 doesn0t 5ust doule the -. return, or to $4.2 illion, ut
magnifies it to $42 6uadrillion7
$t the foundation of our in'estment philosoph" is that o'er time, share prices are nearl" 1//.
correlated with earnings. *ence, our o5ecti'e is to identif" companies that can grow their earnings
at a high and sustainale rate and hold on for the ride.
In the world of in'esting, few stoc&s ha'e accomplished the returns of Peter Minuit, "et, consider
that Microsoft went from a $-// million mar&et cap compan" at the time of its IP+ to nearl" $4//
illion toda" " growing its earnings at appro8imatel" a 4/. compound annual growth rate o'er
the past 12 "ears.
,he tric&, of course, is that it is almost impossile to grow at a rate that high, for that long of a
period, as the laws of compounding cause growth to diminish with si9e. #earing this out is the fact
that there are fewer than 1/ companies that managed to grow their earnings in e8cess of 2/.
annuall" during the past 1/ "ears : out of a uni'erse of more than 12,/// companies7
Questions on the article:
- /he 4() grew to $illions of dollars in *:: years due to compound interest&
Suppose we were dealing with simple interest instead& What would the price of
Hanhattan $e assuming a ," :&," and !8 interest rate?
(- /he article says 2laws of compounding cause growth to diminish with si>e3& Why
do you thin. that#s true?
*- Challenge: %rom the article" is it possi$le to determine the num$er of periods per
year in which the principle was compounded?