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Use a calculator to find e 0.5 . Round to five decimal places.

e 0.5 0.60653

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Investigating continuous growth

So far we have worked with rational bases for exponential functions. For most real-world phenomena, however, e is used as the base for exponential functions. Exponential models that use e as the base are called continuous growth or decay models . We see these models in finance, computer science, and most of the sciences, such as physics, toxicology, and fluid dynamics.

The continuous growth/decay formula

For all real numbers t , and all positive numbers a and r , continuous growth or decay is represented by the formula

A ( t ) = a e r t

where

  • a is the initial value,
  • r is the continuous growth rate per unit time,
  • and t is the elapsed time.

If r > 0 , then the formula represents continuous growth. If r < 0 , then the formula represents continuous decay.

For business applications, the continuous growth formula is called the continuous compounding formula and takes the form

A ( t ) = P e r t

where

  • P is the principal or the initial invested,
  • r is the growth or interest rate per unit time,
  • and t is the period or term of the investment.

Given the initial value, rate of growth or decay, and time t , solve a continuous growth or decay function.

  1. Use the information in the problem to determine a , the initial value of the function.
  2. Use the information in the problem to determine the growth rate r .
    1. If the problem refers to continuous growth, then r > 0.
    2. If the problem refers to continuous decay, then r < 0.
  3. Use the information in the problem to determine the time t .
  4. Substitute the given information into the continuous growth formula and solve for A ( t ) .

Calculating continuous growth

A person invested $1,000 in an account earning a nominal 10% per year compounded continuously. How much was in the account at the end of one year?

Since the account is growing in value, this is a continuous compounding problem with growth rate r = 0.10. The initial investment was $1,000, so P = 1000. We use the continuous compounding formula to find the value after t = 1 year:

A ( t ) = P e r t Use the continuous compounding formula . = 1000 ( e ) 0.1 Substitute known values for  P ,   r ,  and  t . 1105.17 Use a calculator to approximate .

The account is worth $1,105.17 after one year.

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A person invests $100,000 at a nominal 12% interest per year compounded continuously. What will be the value of the investment in 30 years?

$3,659,823.44

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Calculating continuous decay

Radon-222 decays at a continuous rate of 17.3% per day. How much will 100 mg of Radon-222 decay to in 3 days?

Since the substance is decaying, the rate, 17.3 % , is negative. So, r   =   0.173. The initial amount of radon-222 was 100 mg, so a = 100. We use the continuous decay formula to find the value after t = 3 days:

A ( t ) = a e r t Use the continuous growth formula . = 100 e 0.173 ( 3 ) Substitute known values for  a ,   r ,  and  t . 59.5115 Use a calculator to approximate .

So 59.5115 mg of radon-222 will remain.

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Using the data in [link] , how much radon-222 will remain after one year?

3.77E-26 (This is calculator notation for the number written as 3.77 × 10 26 in scientific notation. While the output of an exponential function is never zero, this number is so close to zero that for all practical purposes we can accept zero as the answer.)

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Questions & Answers

how can are find the domain and range of a relations
austin Reply
A cell phone company offers two plans for minutes. Plan A: $15 per month and $2 for every 300 texts. Plan B: $25 per month and $0.50 for every 100 texts. How many texts would you need to send per month for plan B to save you money?
Diddy Reply
6000
Robert
more than 6000
Robert
can I see the picture
Zairen Reply
How would you find if a radical function is one to one?
Peighton Reply
how to understand calculus?
Jenica Reply
with doing calculus
SLIMANE
Thanks po.
Jenica
Hey I am new to precalculus, and wanted clarification please on what sine is as I am floored by the terms in this app? I don't mean to sound stupid but I have only completed up to college algebra.
rachel Reply
I don't know if you are looking for a deeper answer or not, but the sine of an angle in a right triangle is the length of the opposite side to the angle in question divided by the length of the hypotenuse of said triangle.
Marco
can you give me sir tips to quickly understand precalculus. Im new too in that topic. Thanks
Jenica
if you remember sine, cosine, and tangent from geometry, all the relationships are the same but they use x y and r instead (x is adjacent, y is opposite, and r is hypotenuse).
Natalie
it is better to use unit circle than triangle .triangle is only used for acute angles but you can begin with. Download any application named"unit circle" you find in it all you need. unit circle is a circle centred at origine (0;0) with radius r= 1.
SLIMANE
What is domain
johnphilip
the standard equation of the ellipse that has vertices (0,-4)&(0,4) and foci (0, -15)&(0,15) it's standard equation is x^2 + y^2/16 =1 tell my why is it only x^2? why is there no a^2?
Reena Reply
what is foci?
Reena Reply
This term is plural for a focus, it is used for conic sections. For more detail or other math questions. I recommend researching on "Khan academy" or watching "The Organic Chemistry Tutor" YouTube channel.
Chris
how to determine the vertex,focus,directrix and axis of symmetry of the parabola by equations
Bryssen Reply
i want to sure my answer of the exercise
meena Reply
what is the diameter of(x-2)²+(y-3)²=25
Den Reply
how to solve the Identity ?
Barcenas Reply
what type of identity
Jeffrey
Confunction Identity
Barcenas
how to solve the sums
meena
hello guys
meena
For each year t, the population of a forest of trees is represented by the function A(t) = 117(1.029)t. In a neighboring forest, the population of the same type of tree is represented by the function B(t) = 86(1.025)t.
Shakeena Reply
by how many trees did forest "A" have a greater number?
Shakeena
32.243
Kenard
how solve standard form of polar
Rhudy Reply
what is a complex number used for?
Drew Reply
It's just like any other number. The important thing to know is that they exist and can be used in computations like any number.
Steve
I would like to add that they are used in AC signal analysis for one thing
Scott
Good call Scott. Also radar signals I believe.
Steve
They are used in any profession where the phase of a waveform has to be accounted for in the calculations. Imagine two electrical signals in a wire that are out of phase by 90°. At some times they will interfere constructively, others destructively. Complex numbers simplify those equations
Tim
Practice Key Terms 4

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Source:  OpenStax, Precalculus. OpenStax CNX. Jan 19, 2016 Download for free at https://legacy.cnx.org/content/col11667/1.6
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