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Example Questions
Example Question #1 : How To Find Compound Interest
A five-year bond is opened with in it and an interest rate of %, compounded annually. This account is allowed to compound for five years. Which of the following most closely approximates the total amount in the account after that period of time?
Each year, you can calculate your interest by multiplying the principle () by . For one year, this would be:
For two years, it would be:
, which is the same as
Therefore, you can solve for a five year period by doing:
Using your calculator, you can expand the into a series of multiplications. This gives you , which is closest to .
Example Question #2 : How To Find Compound Interest
If a cash deposit account is opened with for a three year period at % interest compounded once annually, which of the following is closest to the positive difference between the interest accrued in the third year and the interest accrued in the second year?
It is easiest to break this down into steps. For each year, you will multiply by to calculate the new value. Therefore, let's make a chart:
After year 1: ; Total interest:
After year 2: ; Let us round this to ; Total interest:
After year 3: ; Let us round this to ; Total interest:
Thus, the positive difference of the interest from the last period and the interest from the first period is:
Example Question #3 : How To Find Compound Interest
Jack has , to invest. If he invests two-thirds of it into a high-yield savings account with an annual interest rate of , compounded quarterly, and the other third in a regular savings account at simple interest, how much does Jack earn after one year?
First, break the problem into two segments: the amount Jack invests in the high-yield savings, and the amount Jack invests in the simple interest account (10,000 and 5,000 respectively).
Now let's work with the high-yield savings account. $10,000 is invested at an annual rate of 8%, compounded quarterly. We can use the compound interest formula to solve:
Plug in the values given:
Therefore, Jack makes $824.32 off his high-yield savings account. Now let's calculate the other interest:
Add the two together, and we see that Jack makes a total of, off of his investments.
Example Question #4 : How To Find Compound Interest
A truck was bought for in 2008, and it depreciates at a rate of per year. What is the value of the truck in 2016? Round to the nearest cent.
The first step is to convert the depreciation rate into a decimal. . Now lets recall the exponential decay model. , where is the starting amount of money, is the annual rate of decay, and is time (in years). After substituting, we get
Example Question #121 : Exponents
If ax·a4 = a12 and (by)3 = b15, what is the value of x - y?
3
-9
6
-4
-2
3
Multiplying like bases means add the exponents, so x+4 = 12, or x = 8.
Raising a power to a power means multiply the exponents, so 3y = 15, or y = 5.
x - y = 8 - 5 = 3.
Example Question #1 : How To Find Patterns In Exponents
If p and q are positive integrers and 27p = 9q, then what is the value of q in terms of p?
(3/2)p
3p
(2/3)p
p
2p
(3/2)p
The first step is to express both sides of the equation with equal bases, in this case 3. The equation becomes 33p = 32q. So then 3p = 2q, and q = (3/2)p is our answer.
Example Question #123 : Exponents
Simplify 272/3.
9
729
3
27
125
9
272/3 is 27 squared and cube-rooted. We want to pick the easier operation first. Here that is the cube root. To see that, try both operations.
272/3 = (272)1/3 = 7291/3 OR
272/3 = (271/3)2 = 32
Obviously 32 is much easier. Either 32 or 7291/3 will give us the correct answer of 9, but with 32 it is readily apparent.
Example Question #124 : Exponents
If and are integers and
what is the value of ?
To solve this problem, we will have to take the log of both sides to bring down our exponents. By doing this, we will get .
To solve for we will have to divide both sides of our equation by to get .
will give you the answer of –3.
Example Question #125 : Exponents
If and , then what is ?
We use two properties of logarithms:
So
Example Question #1 : How To Find Patterns In Exponents
Evaluate:
, here and , hence .
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