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Natural Number-Exponential Function

Here are the calculations for each plan: 1st Plan (7% compounded monthly): - Monthly interest rate = 0.07/12 = 0.005833 - Number of months = 6 * 12 = 72 - Final amount = 8000 * (1 + 0.005833)72 = Php 13,863.62 2nd Plan (7% compounded continuously): - Annual interest rate = 0.07 - Number of years = 6 - Final amount = 8000 * e0.07*6 = Php 14,169.56 The second plan that compounds interest continuously would be the better investment since it yields a higher final amount of Php 14,

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52 views13 pages

Natural Number-Exponential Function

Here are the calculations for each plan: 1st Plan (7% compounded monthly): - Monthly interest rate = 0.07/12 = 0.005833 - Number of months = 6 * 12 = 72 - Final amount = 8000 * (1 + 0.005833)72 = Php 13,863.62 2nd Plan (7% compounded continuously): - Annual interest rate = 0.07 - Number of years = 6 - Final amount = 8000 * e0.07*6 = Php 14,169.56 The second plan that compounds interest continuously would be the better investment since it yields a higher final amount of Php 14,

Uploaded by

Team BEE
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Check this out!

“ To express e remember
to memorize a sentence
to simplify this…”

e=
The Number e
known as Euler’s number
Leonard Euler (1700’s) discovered it’s
importance
It occurs naturally in any situation
where a quantity increases at a rate
proportional to its value, such as a bank
account producing interest, or a
population increasing as its members
reproduce.
The Number e - Definition
An irrational number
appears as the base in many applied exponential
functions
It models a variety of situations in which a
quantity grows or decays continuously: money,
drugs in the body, probabilities, population
studies, atmospheric pressure, optics, and even
spreading rumors!
The number e is defined as the value that
n
 1  approaches as n gets larger and larger.
1  
 n
The Number e - Definition
n  1
n

The table shows the


n 1 2
1  
 n
 1
values of 1  n  as n gets
A 0
2 2.25
increasingly large. 5 2.48832
10 2.59374246
100 2.704813829
As n   , the 1000 2.716923932

approximate value of e 10,000 2.718145927


100,000 2.718268237
(to 9 decimal places) is ≈ 1,000,000 2.718280469
2.718281827 1,000,000,000 2.718281827
n
 1
As n  , 1    e
 n
The Number e - Definition
For our purposes,
we will use e ≈ y=e

2.718.
n

e is 2nd function on  1
y  1  
 n
the division key on
your calculator.
The Number e - Definition
Since 2 < e < 3, the y=3
x
y = ex

graph of y = ex is
between the graphs of
y = 2x and y = 3x
y = 2x
y =e

ex is the 2nd function on


your calculator
Natural Base
The irrational
number e, is called
the natural base.
The function f(x) =
ex is called the
natural exponential
function.
Input this :D
Use a calculator to evaluate the
function given by f (x) = ex at each
indicated value of x.
a. x = –2
b. x = –1
c. x = 0.25
d. x = –0.3
Some applications
 Recall the formula for COMPOUND
INTEREST:

After t years, the balance A in an account


with principal P, for n compounding per
year and annual interest rate r (in decimal)
Interest Compounded
Continuously
If interest is compounded “all the
time” (MUST use the word
continuously), we use the formula
A(t )  Pe rt

where P is the initial principle


(initial amount)
If you invest Php 100.00 at a 7% annual
rate that is compounded continuously, how
much will you have in 4 years?

A(t )  Pe rt
  (𝟎 .𝟎𝟕)(𝟒)
𝟏𝟎𝟎 ( 𝒆 ) =𝟏𝟑𝟐 .𝟑𝟏𝟐𝟗𝟖𝟏𝟐
You will have a whopping Php132.31 in
4 years!
Try me !
You decide to invest Php8000.00
for 6 years and have a choice
between 2 accounts. The first pays
7% per year, compounded monthly.
The second pays 7% per year,
compounded continuously. Which
is the better investment?
Check?
 1st Plan:

2nd Plan:

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