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304 CHAPTER 4 Exponential and Logarithmic Functions 4-14

24. (3.2)2x3  (3.2)2x 39. PRESENT VALUE How much money should be
x2 1 invested now at 7% to obtain $9,000 in 5 years if
25. 10  10 3
interest is compounded:

 
1 1x2
26.  1,000 a. Quarterly
10 b. Continuously

18  40. PRESENT VALUE What is the present value of

x1 2
27.  232x
$10,000 over a 5-year period of time if interest is
compounded continuously at an annual rate of
19 
13x2
28.  34x 7%? What is the present value of $20,000 under
the same conditions?
41. DEMAND A manufacturer estimates that when
In Exercises 29 through 32, use a graphing calculator x units of a particular commodity are produced,
to sketch the graph of the given exponential function. the market price p (dollars per unit) is given by
29. y  31x the demand function
30. y  ex2 p  300e0.02x
31. y  4  ex a. What market price corresponds to the produc-
tion of x  100 units?
32. y  2x2 b. How much revenue is obtained when 100 units
of the commodity are produced?
In Exercises 33 and 34, find the values of the constants c. How much more (or less) revenue is obtained
C and b so that the curve y  Cbx contains the when x  100 units are produced than when
indicated points. x  50 are produced?
33. (2, 12) and (3, 24) 42. DEMAND A manufacturer estimates that when
34. (2, 3) and (3, 9) x units of a particular commodity are produced,
the market price p (dollars per unit) is given by
35. COMPOUND INTEREST Suppose $1,000 the demand function
is invested at an annual interest rate of 7%.
p  7  50ex/200
Compute the balance after 10 years if the interest
is compounded: a. What market price corresponds to the produc-
a. Annually tion of x  0 units?
b. Quarterly b. How much revenue is obtained when 200 units
c. Monthly of the commodity are produced?
d. Continuously c. How much more (or less) revenue is obtained
when x  100 units are produced than when
36. COMPOUND INTEREST Suppose $5,000 x  50 are produced?
is invested at an annual interest rate of 10%.
Compute the balance after 10 years if the interest 43. POPULATION GROWTH It is projected that t
is compounded: years from now, the population of a certain
a. Annually country will be P(t)  50e0.02t million.
b. Semiannually a. What is the current population?
c. Daily (using 365 days per year) b. What will the population be 30 years from now?
d. Continuously 44. POPULATION GROWTH It is estimated
37. PRESENT VALUE How much money should be that t years after 2000, the population of a certain
invested today at 7% compounded quarterly so country will be P(t) million people where
that it will be worth $5,000 in 5 years? P(t)  2  50.018t
38. PRESENT VALUE How much money should be a. What was the population in 2000?
invested today at an annual interest rate of 7% b. What will the population be in 2010?
compounded continuously so that 20 years from 45. DRUG CONCENTRATION The concentration
now it will be worth $20,000? of drug in a patient's bloodstream t hours after an
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4-15 SECTION 4.1 EXPONENTIAL FUNCTIONS; CONTINUOUS COMPOUNDING
injection is given by C(t)  3  20.75t milligrams
per milliliter (mg/mL).
a. What is the concentration when t  0? After 1
hour?
b. What is the average rate of change of concentra-
tion during the second hour?
46. DRUG CONCENTRATION The concentration
of drug in a patient's bloodstream t hours after an
injection is given by C(t)  Ae0.87t milligrams
per millimeter (mg/ml) for constant A. The
concentration is 4 mg/ml after 1 hour.
a. What is A?
b. What is the initial concentration (t  0)? The
concentration after 2 hours?
c. What is the average rate of change of concentra-
tion during the first two hours?
47. BACTERIAL GROWTH The size of a bacterial
culture grows in such a way that after t minutes,
there are P(t)  A  20.001t bacteria present, for
some constant A. After 10 minutes, there are
10,000 bacteria.
a. What is A?
b. How many bacteria are initially present (t  0)?
After 20 minutes? After 1 hour?
c. At what average rate does the bacterial popula-
tion change over the second hour?
48. ADVERTISING A marketing manager estimates
that t days after termination of an advertising
campaign, the sales of a new product will be S(t)
units, where
S(t)  4000 e0.015t
a. How many units are being sold at the time
advertising ends?
b. How many units will be sold 30 days after the
advertising ends? After 60 days?
c. At what average rate do sales change over the
first three months (90 days) after advertising
ends?
49. REAL ESTATE INVESTMENT In 1626, Peter
Minuit traded trinkets worth $24 to a tribe of
Native Americans for land on Manhattan Island.
Assume that in 1990 the same land was worth
$25.2 billion. If the sellers in this transaction had
invested their $24 at 7% annual interest
compounded continuously during the entire
364-year period, who would have gotten the better
end of the deal? By how much?
305
50. GROWTH OF GDP The gross domestic
product (GDP) of a certain country was $500
billion at the beginning of the year 2000 and
increases at the rate of 2.7% per year. (Hint:
Think of this as a compounding problem.)
a. Express the GDP of this country as a function of
the number of years t after 2000.
b. What does this formula predict the GDP of the
country will be at the beginning of the year 2010?
51. POPULATION GROWTH The size of a
bacterial population P(t) grows at the rate of 3.1%
per day. If the initial population is 10,000, what is
the population after 10 days? (Hint: Think of this
as a compounding problem.)
52. SUPPLY A manufacturer will supply
S(x)  300e0.03x 310 units of a particular
commodity when the price is x dollars per unit.
a. How many units will be supplied when the unit
price is $10?
b. How many more units will be supplied when the
unit price is $100 than when it is $80?
53. DRUG CONCENTRATION The concentration
of a certain drug in an organ t minutes after an
injection is given by
C(t)  0.065(1  e0.025t)
grams per cubic centimeter (g/cm3).
a. What is the initial concentration of drug
(when t  0)?
b. What is the concentration 20 minutes after an
injection? After 1 hour?
c. What is the average rate of change of concentra-
tion during the first minute?
d. What happens to the concentration of the drug
in the long run (as t → )?
e. Sketch the graph of C(t).
54. DRUG CONCENTRATION The concentration
of a certain drug in an organ t minutes after an
injection is given by
C(t)  0.05  0.04(1  e0.03t )
grams per cubic centimeter (g/cm3).
a. What is the initial concentration of drug
(when t  0)?
b. What is the concentration 10 minutes after an
injection? After 1 hour?
c. What is the average rate of change of concentra-
tion during the first hour?
d. What happens to the concentration of the drug
in the long run (as t → )?
e. Sketch the graph of C(t).
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306 CHAPTER 4 Exponential and Logarithmic Functions
In Exercises 55 through 58, find the effective interest
rate re for the given investment.
55. Annual interest rate 6%, compounded quarterly
56. Annual interest rate 8%, compounded daily
(use k  365)
57. Nominal annual rate of 5%, compounded continuously
58. Nominal annual rate of 7.3%, compounded
continuously
59. RANKING INVESTMENTS In terms of
effective interest rate, order the following nominal
rate investments from lowest to highest:
a. 7.9% compounded semiannually
b. 7.8% compounded quarterly
c. 7.7% compounded monthly
d. 7.65% compounded continuously
60. RANKING INVESTMENTS In terms of
effective interest rate, order the following nominal
rate investments from lowest to highest:
a. 4.87% compounded quarterly
b. 4.85% compounded monthly
c. 4.81% compounded daily (365 days)
d. 4.79% compounded continuously
61. EFFECT OF INFLATION Tom buys a rare
stamp for $500. If the annual rate of inflation is
4%, how much should he ask when he sells it in
5 years in order to break even?
62. EFFECT OF INFLATION Suppose during a
10-year period of rapid inflation, it is estimated
that prices inflate at an annual rate of 5% per
year. If an item costs $3 at the beginning of the
period, what would you expect to pay for the
same item 10 years later?
63. PRODUCT RELIABILITY A statistical study
indicates that the fraction of the electric toasters
manufactured by a certain company that are still
in working condition after t years of use is
approximately f(t)  e0.2t.
a. What fraction of the toasters can be expected to
work for at least three years?
b. What fraction of the toasters can be expected to
fail before 1 year of use?
c. What fraction of the toasters can be expected to
fail during the third year of use?
64. LEARNING According to the Ebbinghaus
model, the fraction F(t) of subject matter you will
remember from this course t months after the final
exam can be estimated by the formula
F(t)  B  (1  B)ekt
4-16
where B is the fraction of the material you will
never forget and k is a constant that depends on
the quality of your memory. Suppose you are
tested and it is found that B  0.3 and k  0.2.
What fraction of the material will you remember
one month after the class ends? What fraction will
you remember after one year?
65. POPULATION DENSITY The population
density x miles from the center of a certain city is
D(x)  12e0.07x thousand people per square mile.
a. What is the population density at the center of
the city?
b. What is the population density 10 miles from
the center of the city?
66. RADIOACTIVE DECAY The amount of a
sample of a radioactive substance remaining
after t years is given by a function of the form
Q(t)  Q0e0.0001t. At the end of 5,000 years,
200 grams of the substance remain. How many
grams were present initially?
67. AQUATIC PLANT LIFE Plant life exists only
in the top 10 meters of a lake or sea, primarily
because the intensity of sunlight decreases
exponentially with depth. Specifically, the
Bouguer-Lambert law says that a beam of light
that strikes the surface of a body of water with
intensity I0 will have intensity I at a depth of x
meters, where I  I0ekx with k  0. The constant
k, called the absorption coefficient, depends on
the wavelength of the light and the density of the
water. Suppose a beam of sunlight is only 10% as
intense at a depth of 3 meters as at the surface.
How intense is the beam at a depth of 1 meter?
(Express your answer in terms of I0.)
68. LINGUISTICS Glottochronology is the
methodology used by linguists to determine how
many years have passed since two modern
languages “branched” from a common ancestor.
Experiments suggest that if N words are in
common use at a base time t  0, then the
number N(t) of them still in use with essentially
the same meaning t thousand years later is given
by the so-called fundamental glottochronology
equation*
N(t)  N0e0.217t
*Source: Anthony LoBello and Maurice D. Weir, “Glottochronology:
An Application of Calculus to Linguistics,” UMAP Modules 1982:
Tools for Teaching, Lexington, MA: Consortium for Mathematics and
Its Applications, Inc., 1983.
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4-17 SECTION 4.1 EXPONENTIAL FUNCTIONS; CONTINUOUS COMPOUNDING
a. Out of a set of 500 basic words used in classical
Latin in 200 B.C., how many would you expect
to be still in use in modern Italian in the year
2010?
b. The research of C. W. Feng and M. Swadesh in-
dicated that out of a set of 210 words commonly
used in classical Chinese in 950 A.D., 167 were
still in use in modern Mandarin in 1950. Is this
the same number that the fundamental glot-
tochronology equation would predict? How do
you account for the difference?
c. Read an article on glottochronology and write a
paragraph on its methodology. You may wish to
begin your research by reading the article cited
in this exercise.
69. POPULATION GROWTH It is estimated that t
years after 1990, the population of a certain
country will be P(t) million people where
P(t)  Ae0.03t  Be0.005t
for certain constants A and B. The population was
100 million in 1992 and 200 million in 2005.
a. Use the given information to find A and B.
b. What was the population in 1990?
c. What will the population be in 2010?
Amortization of Debt ■ If a loan of A dollars
is amortized over n years at an annual interest rate r
(expressed as a decimal) compounded monthly, the
monthly payments are given by
Ai
M
1  (1  i)12n
r
where i  is the monthly interest rate. Use this
12
formula in Exercises 70 through 73.
70. FINANCE PAYMENTS Determine the monthly
car payment for a new car costing $15,675, if
there is a down payment of $4,000 and the car is
financed over a 5-year period at an annual rate of
6% compounded monthly.
71. MORTGAGE PAYMENTS A home loan is
made for $150,000 at 9% annual interest,
compounded monthly, for 30 years. What is the
monthly mortgage payment on this loan?
307
72. MORTGAGE PAYMENTS Suppose a family
figures it can handle monthly mortgage payments
of no more than $1,200. What is the largest
amount of money they can borrow, assuming the
lender is willing to amortize over 30 years at 8%
annual interest compounded monthly?
73. TRUTH IN LENDING You are selling your car
for $6,000. A potential buyer says, “I will pay you
$1,000 now for the car and pay off the rest at
12% interest with monthly payments for 3 years.
Let’s see . . . 12% of the $5,000 is $600 and
$5,600 divided by 36 months is $155.56, but I’ll
pay you $160 per month for the trouble of
carrying the loan. Is it a deal?”
a. If this deal sounds fair to you, I have a perfectly
lovely bridge I think you should consider as
your next purchase. If not, explain why the deal
is fishy and compute a fair monthly payment
(assuming you still plan to amortize the debt of
$5,000 over 3 years at 12%).
b. Read an article on truth in lending and think up
some examples of plausible yet shady deals,
such as the proposed used-car transaction in this
exercise.
74. Two graphs y  f (x) and y  g(x) are reflections
of one another in the y axis if whenever (a, b) is
a point on one of the graphs, then (a, b) is a
point on the other, as indicated in the
accompanying figure. Use this criterion to show
that the graphs of

1 x
y  b x and y  for b  0, b  1 are
b
reflections of one another in the y axis.
y
y  g(x) y  f(x)
(a, b) (a, b)
x
a a
EXERCISE 74