16 Section 46 Find the exponential growthdecay function that

16. Section 4.6 Find the exponential growth/decay function that satisfies the following equation N(0)=1,N(2)=5 Find the balance when $48000 is invested at an annual interest rate of 3.75% for 25 years when interest is compounded a. b. i. Semiannually ii. Monthly ii. Daily

Solution

b)

P = $48000

r = 0.0375

t = 25 years

i) n = 2

A = P(1 + r/n)^nt = 48000(1 + 0.0375/2)^(2*25) = $121512.88

ii) n = 12

A = P(1 + r/n)^nt = 48000(1 + 0.0375/12)^(12*25) = $122393.25

ii) A = P*e^rt = 48000*e^(0.0375*25) = $122572.3