Unit - Exponential and Log Functions
Unit - Exponential and Log Functions
Name:____________________________________
Date:_____________________________________
(2)
(b) -27x5y6
(c) -27x6y9
(d) -3x5y6
Simplify: (3 a ) 2 (3 a 4 )
(2)
(a) 3 a
(3)
a 4
(b) 3 3 a 4
(c) 3 2a 6
(d) 3 a
4a
(4)
(b) a3 = x
(c) ax = 3
(d) 3a = x
(5)
(b) a log x y
(6)
log 3 + 2 log 2
log 6 + log 6
log 3 log 4
log 3 2 log 2
4 log x
log 4 + log x
(log 4)(log x)
log x4
(7)
a3
is equivalent to:
b
(7)
log a
log b
(a) 3
1
(log a log b)
3
(c) 3(log a log b)
(b)
(8)
1
log b is equivalent to:
2
(8)
(a)
(b)
log(a
b)
log a b
log b
2
(c) log a
(d)
(9)
log
ab
(10)
log A p 2 log r
log A 2p(log r )
log A log p log 2 log r
log A log p 2 log r
37 x 53
( x 7)3 125
3 x 7 53
3 x 21 15
Precalculus
Lesson- properties, equations with exponents and
power and exponential functions
Name:__________________________________
Date:___________________________________
2
Objectives:
Do Now: Use the exponential properties to simplify and rewrite the following expressions:
(1)
ax ay
(2)
(3)
ab x
(4)
(5)
ax
ay
(6)
a x
(7)
a0
x y
__________________________________________________________________________________________
In Small Groups: Use each example in the Do Now to arrive at general rules as they apply to monomials with
exponents.
Process 2
45 x1 16 2 x1
x 1 4
3.
6.
3x 9 x4
( 2 x 1)5 32
Power function:
exponential function:
(2)
(3)
(4)
Characteristics of graphs of y = nx
n>1
0<n<1
domain
range
y-intercept
behavior
horizontal asymptote
vertical asymptote
Extension: Graph the exponential functions y = 2x, y = 2x + 3, and y = 2x 2 on the same set of axes.
Compare and contrast the graphs using a table similar to the one above.
Precalculus
Name:__________________________________
Lesson- Graphing exponential functions, exponential
growth and decay
Date:___________________________________
Objectives:
Exponential decay:
(1) Write a formula that represents the average growth of the population of a city with a rate of 7.5% per year.
Let x represent the number of years, y represent the most recent total population of the city, and A is the
citys population now. What is the expected population in 10 years if the citys population now is 22,750
people? Graph the function for 0 x 20.
__________________________________________________________________________________________
(2) Suppose the value of a computer depreciates at a rate of 25% a year. Determine the value of a laptop
computer two years after it has been purchased for $3,750.
(3) Mexico has a population of about 100 million people, and it is estimated that the population will double in
21 years. If population growth continues at the same rate, what will be the population in:
(a) 15 years
(b) 30 years
(c) graph the population growth for 0 time 50
__________________________________________________________________________________________
(4) A researcher estimates that the initial population of honeybees in a colony is 500. They are increasing at a
rate of 14% per week. What is the expected population in 22 weeks?
(5) In 1990, Exponential City had a population of 700,000 people. The average yearly rate of growth is 5.9%.
Find the projected population for 2010.
In Honolulu, Hawaii, the population was 836,231 in 1990. The average yearly rate of growth is
0.7%.
(b)
The population in Kings County, New York has demonstrated an average decrease of 0.45% over
several years. The population in 1997 was 2,240,384.
Precalculus
Lesson- More exponential function graphs,
Population growth, half-life
Objectives:
Name:____________________________________
(1) The population of Los Angeles County was 9,145,219 in 1997. If the average growth rate is 0.45%, predict
the population in 2010.
Graph the equation for 0 time 20.
(2) Radioactive gold 198 (198Au), used in imaging the structure of the liver, has a half-life of 2.67 days. If the
initial amount is 50 milligrams of the isotope, how many milligrams (rounded to the nearest tenth) will be
left over after:
(a) day
(b) 1 week
(3) If a farmer uses 25 pounds of insecticide, assuming its half-life is 12 years, how many pounds (rounded to
the nearest tenth) will still be active after:
(a) 5 years
(b) 20 years
(4) In 2000, the chicken population on a farm was 10,000. The number of chickens increased at a rate of 9%
per year. Predict the population in 2005.
Graph the equation for 0 time 15.
(5) If Kenya has a population of about 30,000,000 people and a doubling time of 19 years and if the growth
continues at the same rate, find the population (rounded to the nearest million) in:
(a) 10 years
(b) 30 years
Precalculus
Lesson- Compound Interest
Name:__________________________________
Date:___________________________________
Objectives:
Do Now:
(1) A laser printer was purchased for $300 in 2001. If its value depreciates at a rate of 30% a year, determine
how much it will be worth in 2007.
(2) Rates can be compounded in different increments per year. Exponential growth occurs how often if the rate
is compounded:
annually:
bi-annually:
quarterly:
monthly:
weekly:
daily:
The general equation for exponential growth is modified for finding the balance in an account that earns
compound interest.
r
Compound Interest: A P 1
nt
10
__________________________________________________________________________________________
(1) If Charlie invested $1,000 in an account paying 10% compounded monthly, how much will be in the
account at the end of 10 years?
(2) Mike would like to have $20,000 cash for a new car 5 years from now. How much should be placed in an
account now if the account pays 9.75% compounded weekly?
(3) Suppose $2,500 is invested at 7% compounded quarterly. How much money will be in the account in:
(c) year
(d) 15 years
__________________________________________________________________________________________
(4) Suppose $4,000 is invested at 11% compounded weekly. How much money will be in the account in:
(e) year
(f) 10 years
11
(5) How much money must Cindy invest for a new yacht if she wants to have $50,000 in her account that earns
5% compounded quarterly after 15 years?
(6) Carol won $5,000 in a raffle. She would like to invest her winnings in a money market account that
provides an APR of 6% compounded quarterly. Does she have to invest all of it in order to have $9,000 in
the account at the end of 10 years? Show your work and explain your answer.
12
Precalculus
Lesson: Exponential Functions with base e
Name:__________________________________
Date:___________________________________
Objective:
Euler Savings Bank provides a savings account that earns compounded interest at a rate of 100%. You may
choose how often to compound the interest, but you can only invest $1 over the course of one year.
13
(1)
According to Newton, a beaker of liquid cools exponentially when removed from a source of heat.
Assume that the initial temperature Ti is 90F and that k = 0.275.
(a) Write a function to model the rate at which the liquid cools.
(c) Graph the function and use the graph to verify your answer in part (b)
14
(2)
(c) Find the number of bacteria (rounded to the nearest whole number) after:
(i) 5 hours
(ii) 1 day
(iii) 3 days
(3)
A citys population can be modeled by the equation y = 33,430e0.0397 t , where t is the number of years since
1950.
(a) Has the city experienced a growth or decline in population?
15
Precalculus
HW- Compound Interest
Name:__________________________________
Date:___________________________________
(1) If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in
the account at the end of:
(a) 6 years 3 months
(b) 204 months
(2) If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in
the account at the end of:
(a) 5.5 years
(b) 12 years
16
__________________________________________________________________________________________
(3) A promissory note will pay $30,000 at maturity 10 years from now. How much should you be willing to
pay for the note now if the note gains value at a rate of 9% compounded continuously?
(4) Suppose Niki deposits $1,500 in a savings account that earns 6.75% interest compounded continuously.
She plans to withdraw the money in 6 years to make a $2,500 down payment on a car. Will there be
enough funds in Nikis account in 6 years to meet her goal? Explain your answer.
17
Precalculus
Lesson- Continuous Compound Interest
Name:__________________________________
Date:___________________________________
Objective:
(1) Tim and Kerry are saving for their daughters college education. If they deposit $12,000 in an account
bearing 6.4% interest compounded continuously, how much will be in the account when she goes to college
in 12 years?
(2) Paul invested a sum of money in a certificate of deposit that earns 8% interest compounded continuously.
If Paul made the investment on January 1, 1995, and the account was worth $12,000 on January 1, 1999,
what was the original amount in the account?
18
(3) Compare the balance after 30 years of a $15,000 investment earning 12% interest compounded
continuously to the same investment compounded quarterly.
(4) Given the original principal, the annual interest rate, the amount of time for each investment, and the type
of compounded interest, find the amount at the end of the investment:
(a) P = $1,250;
r = 8.5%;
t = 3 years;
compounded semi-annually
(b) P = $2,575;
r = 6.25%;
t = 5 years 3 months;
compounded continuously
19
Precalculus
HW- Compound Interest
Name:__________________________________
Date:___________________________________
(1) If you invest $5,250 in an account paying 11.38% compounded continuously, how much money will be in
the account at the end of:
(a) 6 years 3 months
(b) 204 months
(2) If you invest $7,500 in an account paying 8.35% compounded continuously, how much money will be in
the account at the end of:
(a) 5.5 years
(b) 12 years
20
__________________________________________________________________________________________
(3) A promissory note will pay $30,000 at maturity 10 years from now. How much should you be willing to
pay for the note now if the note gains value at a rate of 9% compounded continuously?
(4) Suppose Niki deposits $1,500 in a savings account that earns 6.75% interest compounded continuously.
She plans to withdraw the money in 6 years to make a $2,500 down payment on a car. Will there be
enough funds in Nikis account in 6 years to meet her goal? Explain your answer.
21
Precalculus
Lesson- Properties of a logs, rewriting
Exponential functions as logarithms, log graphs
Name:____________________________________
Date:_____________________________________
Objective:
To learn what a logarithm is
To learn the properties of logs
To learn to rewrite an exponential function as a logarithm
Graphing logs
Do Now:
Solve for x: 3x 9 x1 and check.
_________________________________________________________________________________________
What is a logarithm?
Logarithms are inverses of exponential functions. Logarithms are functions because exponential functions are
one-to-one functions.
We cannot solve an equation like: y 2 x using the algebraic techniques we have learned so far. Therefore, we
must try an alternative technique.
Rule: x b y is equivalent to y log b x
The log to the base b is the exponent to which b must be raised to obtain x.
Properties of Logs
logb 1 0
logb b 1
logb b x x
M
logb M logb N
N
logb Mp p logb M
logb
Example:
Convert each into logarithmic form
1. y 2 x
4. log 25 5
2.
3.
1
51
5
1
2
log
b
c
5.
a
1
6. log 3 2
9
22
__________________________________________________________________________________________
What is a Natural Logarithm?
Properties of Logs
ln 1 0
ln b 1
ln e x x
e ln x x , where x > 0
ln MN ln M ln N
M
ln
ln M ln N
N
ln M
Example:
Convert each into logarithmic form
1. y e x
2. e x
3.
1
e 1
e
p ln M
Example:
Graph each of the following on the same set of axes using the graphing calculator. y
1. y 2 x
2. x 2 y
3. log 2 y x
4. log 2 x y
5. y e x
6. x e y
7. ln y x
8. ln x y
Precalculus
Name:__________________________________
Lesson/HW- Simplify log expressions, common logs, evaluate
Date:___________________________________
Objectives:
(3) logb
m
n
2
3
1
2
(5) logb x
(2) logb
1
a2
(4) logb
u
vw
(6) logb
n
p q3
2
(7) Use logarithmic properties to find the value of x (without using a calculator):
logb x
1
2
logb 9 logb 8 logb 6
2
3
24
Write each expression in terms of a single logarithm with a coefficient of one: ie : 2 logb u logb v logb
(8) 5 logb x 4 logb y
u2
v
1
4
(11) 8 logb c
3
2
1
3
2
3
(13) logb (a b )
Common Logarithm:
log10 log x
log a ln a log p a
log b ln b log p b
Extension: Given y = logb n, what can you determine about the log value (y) based on b and n?
25
Precalculus
Lesson/HW- Properties of Logarithmic Functions,
Simplifying logarithmic expressions
Objective:
Name:____________________________________
Date:_____________________________________
log5 x 2
(2)
log4 64 x
(3)
logx 8 3
(4)
log8 x
2
3
log8 8
(6)
log0.5 1
(7)
log10 1,000
(8)
log2 64
(9)
log7 343
(10)
log10 0.001
(11)
loge
(12)
log5 3 5
26
logb x 6 y 9
(15)
logb
(17)
logb 5 x
Precalculus
mn
pq
(14)
logb
v7
u8
(16)
logb
1
a4
(18)
logb 3 x 2 y 2
Name:____________________________________
27
Date:_____________________________________
Objective:
DO NOW:
__________________________________________________________________________________________
I.
1.
2.
3.
4.
Graph each of the following on the same set of coordinate axes and answer the following questions.
y log 2 ( x 1)
a.
What are some notable similarities and differences among the graphs?
b.
II.
1.
2.
3.
4.
Graph each of the following on the same set of coordinate axes and answer the following questions.
y log 2 ( x 1)
y log 2 ( x 2)
y log 2 ( x 3)
y log 2 ( x 4)
a.
What are some notable similarities and differences among the graphs?
b.
y log3 ( x 1)
y log 4 ( x 1)
y log5 ( x 1)
Name:__________________________________
28
Do Now:
Laura won $2,500 on a game show. She would like to invest her winnings in an account that earns an interest
rate of 12% compounded continuously. Does she have to invest all of it in order to have $4,000 in the account
at the end of 4 years to put a down payment on a new sailboat? Show your work and explain your answer.
(1)
Ana is trying to save for a new house. How many years, to the nearest year, will it take Ana to triple the
money in her account if it is invested at 7% compounded annually?
(2)
At what annual percentage rate (to the nearest hundredth of a percent) compounded continuously will
$6,000 have to be invested to amount to $11,000 in 8 years.
29
__________________________________________________________________________________________
(3) In 1990, Exponential City had a population of 142,000 people. In what year will the city have a
population of about 200,000 people if it was growing at an exponential rate of k = 0.014?
(4)
If $5,000 is invested at an annual interest rate of 5% compounded quarterly, how long will it take the
investment to double?
(5)
What was the annual interest rate (to the nearest hundredth of a percent) of an account that took 12 years
to double if the interest was compounded continuously and no deposits or withdrawals were made during
the 12-year period?
30
Precalculus
Lesson- More natural log word problems
Name:__________________________________
Date:___________________________________
Objective:
(1) If a car originally costs $18,000 and the average rate of depreciation is 30%, find the value of the car to the
nearest dollar after 6 years.
(2) How many years, to the nearest year, will it take for the balance of an account to double if it is gaining 6%
interest compounded semiannually?
(3) When Rachel was born, her mother invested $5,000 in an account that compounded 4% interest monthly.
Determine the value of this investment when Rachel is 25 years old.
31
__________________________________________________________________________________________
0.000124 t
(4) The decay of carbon-14 can be described by the formula A A 0 e
. Using this formula, how many
years, to the nearest year, will it take for carbon-14 to diminish to 1% of the original amount?
(5) In 2002, a farmer had 400 pigs on his farm. He estimated that this population of pigs will double in 15
years. If population growth continues at the same rate, predict the number of pigs in:
a. 2010
b. 2030
(6) If the world population is about 6 billion people now and if the population grows continuously at an annual
rate of 1.7%, what will the population be (to the nearest billion) in 10 years from now?
32
__________________________________________________________________________________________
(7) If $100 is invested in an account that has an interest of 7% compounded quarterly, how long will it take for
the balance to reach a value of $1,000?
(8) What interest rate (to the nearest hundredth of a percent) compounded monthly is required for an $8,500
investment to triple in 5 years?
(9) An optical instrument is required to observe stars beyond the sixth magnitude, the limit of ordinary vision.
However, even optical instruments have their limitations. The limiting magnitude L of any optical
telescope with lens diameter D, in inches, is given by the equation L 8.8 5.1 log D . Use this equation
to find the following to the nearest tenth:
a. the limiting magnitude for a homemade 6-inch reflecting telescope.
b. the diameter of a lens that would have a limiting magnitude of 20.6.
33
Definition
Product
xa xb xa b
Quotient
xa
x a b , where x 0
xb
(xa)b = xab
(xy)a = xa ya
x
y
xa
ya
, where y 0
x0 = 1, where x 0
x n
1
, where x 0
xn
1
n
Rational Exponent
x n x
for any real number x 0 and any integer n > 1
and when x < 0 and n is odd
N = N0 (1 + r)t
Exponential
Growth/Decay
Compound
Interest (Periodic)
Exponential
Growth/Decay
(in terms of e)
Continuously
Compounded
Interest
where: N is the final amount, N0 is the initial amount, t is the number of time
periods, and r is the average rate of growth(positive) or decay(negative) per
time period
r
A P 1
n
nt
34
Logarithmic
Functions
Common
Logarithms
log x log10 x
log x y 10 y x
Change of Base
Formula
loga n
logb n
logb a
Natural
Logarithms
ln x loge x
ln x = y e y x
Examples
logb 1 0
written exponentially: b0 = 1
logb b 1
written exponentially: b1 = b
logb b x x
written exponentially: bx = bx
10 log 10 7 7
log3 9 x log3 9 log3 x
logb
2
log4 2 log4 5
5
7
log8 log8 7 log8 x
x
log2 6 x x log2 6
logb Mp p logb M
if and only if
log4
M
logb M logb N
N
logb M logb N
log5 y 4 4 log5 y
M=N
log6 (3 x 4) log6 (5 x 2)
( 3 x 4 ) ( 5 x 2)
35
Examples
logb 1 0
written exponentially: b0 = 1
logb b 1
written exponentially: b1 = b
logb b x x
written exponentially: bx = bx
10 log 10 7 7
log3 9 x log3 9 log3 x
logb
2
log4 2 log4 5
5
7
log8 log8 7 log8 x
x
log2 6 x x log2 6
logb M p logb M
p
if and only if
log4
M
logb M logb N
N
logb M logb N
log5 y 4 4 log5 y
M=N
log6 (3 x 4) log6 (5 x 2)
( 3 x 4 ) ( 5 x 2)
Common Errors:
logb M
logb M logb N
logb N
logb (M N) logb M logb N
(logb M) p logb M
p
M
N
log b M
cannot be simplified
logb N
logb M logb N logb MN
p logb M logb Mp
(logb M)p cannot be simplified
Precalculus
Review- Exponential and Logarithmic Functions part 1
Name:____________________________________
Date:_____________________________________
36
ANSWER THE FOLLOWING QUESTIONS ON A SEPARATE SHEET OF PAPER AND SHOW ALL WORK!
Write each expression in terms of simpler logarithmic forms:
(1) logb x y
4
5
(2) log s
b
u7
(3) logb
1
c8
(4) logb
m 5 n3
p
(6)
log 1 5
2
Solve each equation and round answers to four decimal places where necessary:
(8) log2 x 3
(11) log 6 x 2
(12) log7
1
x
49
(13) logx 4
1
2
(14) 10 x 27.5
(17) log4 x 3
(20) 2 1.002 4 x
(21) e 25 x 1.25
Precalculus
Review- Exponential and Logarithmic Functions part 2
1
log 6 36 log 6 x
2
Name:____________________________________
Date:_____________________________________
(1) Anthony is an actuary working for a corporate pension fund. He needs to have $14.6 million grow to $22
million in 6 years. What interest rate (to the nearest hundredth of a percent) compounded annually does he
need for this investment?
(2) The number of guppies living in Logarithm Lake doubles every day. If there are four guppies initially:
c.
Express the number of guppies as a function of the time t.
d.
Use your answer from part (a) to find how many guppies are present after 1 week?
e.
Use your answer from part (a) to find, to the nearest day, when will there be 2,000 guppies?
38
i
0.00235 x . What is the intensity, to the nearest tenth, at a depth of 40 feet?
12
(4) Tiki went to a rock concert where the decibel level was 88. The decibel is defined by the formula
D 10 log
i
, where D is the decibel level of sound, i is the intensity of the sound, and i0 = 10 -12 watt per
i0
square meter is a standardized sound level. Use this information and formula to find the intensity of the
sound at the concert.
39
(6) Bank A pays 8.5% interest compounded annually and Bank B pays 8% interest compounded quarterly. If
you invest $500 over a period of 5 years, what is the difference in the amounts of interest paid by the two
banks?
(7) Determine how much time, to the nearest year, is required for an investment to double in value if interest is
earned at the rate of 5.75% compounded quarterly.
40
Precalculus
Activity- Review of Expoenentials and Logs
Name:__________________________
Date:___________________________
The accompanying diagrams contain exponential and logarithmic expressions and equations. When cut out, the
18 equilateral triangles fit together to form a large rhombus. For the triangles to create this shape, two
expressions that are equivalent must be touching each other, sharing the same edge. All triangles must be used
to complete the rhombus. There are expressions that have either the same or similar answers, so check your
work and each pairing carefully; otherwise you may find triangles that do not fit properly.
SHOW ALL WORK ON A SEPARATE SHEET OF PAPER!
41
Precalculus
Test x 2 - Winter Project
Name:____________________________________
Date:_____________________________________
Objective:
To use exponential & log functions to design a plan to save $1 million as quickly as possible.
Research
You will need:
Math
You will need to include:
~Written explanation of your scenario (typed, double spaced, 12 point TNR font)
~exponential and logarithmic equations and their solutions or TVM Solver Data
~Graphs that model the rate of profit/income growth
~Written conclusion discussing the viability of your scenario
Due
Friday January 9, 2009
You will have (2) class sessions before the due date during which you may conduct research, ask questions of
me, conduct mathematical computations, and/or work on the verbal portion of the project.
We will also have (2) class sessions in a computer lab where we will:
1.
Learn how to create MS Word documents consisting of mathematical equations
2.
Be able to conduct research for our projects.
IDEAS?
Student LoansSavings AccountsTransportationOwn/Rent HouseInsuranceJobsMiscellaneous-
42
Precalculus
Model- Winter Project Calculations (Bland)
Name:____________________________________
Date:_____________________________________
Math Teacher, Teach Math, $4750 per month (used Median career value)
4% Savings account, deposit income expense each month
Prior Savings
$50,000
I had two expenses that did not carry on forever. Therefore I decided to break my project up into phases.
Phase I
0 t 5 Years
Income Expenditures
$4750 $400
$75
$500
$350
$1500
$50
$100
$333
$373
Phase II
5 t 20 Years
Surplus of $1069/month
Surplus of $1402/month
Phase I:
Phase II:
Income Expenditures
$4750 $400
$75
$500
$350
$1500
$50
$100
$373
Phase III
t 20 Years
Income Expenditures
$4750 $400
$75
$500
$350
$1500
$50
$100
Surplus of $1775/month
43
**Note- Two very important things to be aware of: a. I never got a raise! Do you think you might? How
much? When? and b. The costs in my scenario never increased! What about inflation? Higher taxes, etc?
44
Precalculus
Lesson- Math on MSWORD
Name:____________________________________
Date:_____________________________________
Objective:
Example:
1.
2.
y 2( x 2) 2 2
Given:
Prove:
On Your Own:
( y 2) 2 ( x 2) 2
1
25
16
1
x 5
x
3 2
4 C3
5 5
x 2 12 x 36 x 2 36
x6
6
2.
tan 590 =
c
15
45
Statistics
Lesson/HW- TVM Solver
Name:____________________________________
Date:_____________________________________
Objective:
To learn how to use the TVM Solver on the TI-83/84 to determine exponential growth and decay
as they apply to:
Savings accounts
Mortgages
Student loan repayment
__________________________________________________________________________________________
Compound Interest Formula:
Mini Example:
_________________________________________________________________________________________
Fields in the TVM
The variables listed in the TVM solver are called 'fields'. Each variable represents a quantity associated with a
common finanial concept or formula.
N: This represents the number of compounding periods in the term of the investment, annuity or loan.
This will always be a positive value.
I%: This represents the 'nominal rate' for an investment, annuity or loan. This will always be a positive
value. Note: We write the percent form here, not the fraction or decimal form of a percent.
PV: This represents the 'present value' of an investment, loan or annuity. This number can be positive or
negative. If the number is positive, then it indicated money was collected as in a loan. If the number is
negative, then it represents money we paid out, as in an investment or loan where we are the lender.
PMT: This represents the payment made to build an annuity or pay off a loan. The value will always be
negative in these situations. If we have a 'payout' annuity, then the value will be positive. In either case,
the value represents the payment per compounding period.
FV: This represents the 'future value' of an investment, annuity or loan after N compounding periods
have passed. This value will be positive or negative depending on the signs of PV and PMT.
P/Y: This value represents the number of payments per year for annuities and loans.
C/Y: This represents the number of compounding periods per year. These must both be positive integers
greater than 1.
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PMT: END BEGIN. This field allows one to set the TVM Solver for 'ordinary' annuities, (END), or
annuities 'due' (BEGIN).
Ex 1: Sue Simmons wants to re-finance her house. She currently owes $120,000 and closing costs will be
$4,500. She gets a 30-year mortgage at 6% nominal interest. How large will her monthly payment be?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
Ex 2: Mike makes an initial deposit in a new savings account of $10,000. If this account accrues interest at a
rate of 3.9% compounded monthly and Mike deposits $500 per month, how many years (to the nearest
month) will it take him to have $1,000,000 in his account?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
Ex 3: Professor X had $50,000 in outstanding student loans at a 6.5% interest rate upon finishing grad school.
If he plans on paying the loan off in 10 years, what will his monthly payment be? How much on total
interest will he have paid at the end of the 10 years?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
On Your Own
1.
Duke plans on purchasing a 3BR house in Scarsdale for $700,000. He takes out a mortgage for
$750,000 to pay for realtor expenses, the first few months of utilities and taxes, and for some minor
cosmetic work on the house. The mortgage he qualifies for is a 30 year loan at 9% nominal interest.
What will his monthly payment be if he somehow got away with putting $0 as a down payment? What
will his monthly payment be if he put $100,000 as a down payment? How much in total interest will be
paid over the life of the 30 year mortgage in each case?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
47
2.
Revisit example 3 from the lesson. Professor X decides to consolidate his loans over a 20 year period at
6% interest. How much more in interest will he have paid than on the 10 year plan?
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
PMT: END BEGIN
48