1.Simplify: 2. Simplify: 3.Simplify: 4.Simplify: 5.Simplify : 6. Simplify: Warmup 11-13.

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1.Simplify: 2. Simplify: 3.Simplify: 4.Simplify: 5.Simplify : 6. Simplify: Warmup 11-13

1.Simplify: 2. Simplify: 3.Simplify: 4.Simplify: 5.Simplify : 6. Simplify: Warmup 11-13

Compound Interest Part 2 (CONTINUOUSLY COMPOUNDED INTEREST) New Formula: A = Pe rt A = Amount Earned P = Principle(amount INVESTED) r = Interest rate t = time in years To enter this formula into calculator: P, 2 nd ln(for e), (r*t) IMPORTANT: If the word “invests”is in problem,use normal formula. If the word “needs” is in problem, use the formula, P = A e rt

Notes – Compound Interest Formula Pe rt EXAMPLES Ex. Suppose a person had $3600 to invest at 3.5% for 6 years. How much would they have at the end of the 6 years if the interest were compounded continuously? Ex. Mary won $7500 in a lottery game. She wants to invest it in an account that earns 5.75% for 4 years. If the interest is compounded continuously, how much would Mary have in the account after 4 years? Ex. Jamie has inherited $9000 from her grandparents. She wants to invest the money in an account earning 3.125% interest for 4 years. If the interest is compounded continuously, how much money will Jamie have in the account after 4 years? Pe rt formula part 2 Examples Ex. Janice needs to earn $10000 in 8 years from her investments. How much money would she need to invest to make this much at 4.25% interest? (interest is compounded continuously) Ex. How much would Janice need to invest in the account above if she could wait 12 years? Ex. Jack needs to earn $4800 to put towards the purchase of a car. If he can get an account that earns 5.5% interest compounded continuously, how much does he need to invest for: a.4 years? b.7years? c.10 years?

Exponential Word Problem Practice Part 2 1. Tim has $4500 to invest. He can get an account that earns 4.75% interest compounded continuously for 5 years. How much money will be in his account at the end of the 5 years? 2. Terri has $9400 to invest. She can get an account that earns 3.5% interest compounded continuously for 3 years. How much money will be in her account after 3 years? 3.Steve won $15000 in the lottery. He wants to invest it in an account that earns 2.875% interest for 6 years. If the interest is compounded continuously, how much money will he have after 6 years? 4.Amanda won $3200 in a radio contest. She wants to invest the money in an account earning 3.25% interest for 8 years. If the interest is compounded continuously, how much would she have in her account after 8 years? 5.Jesse has saved $1800 from his last several birthdays. He would like to invest the money in an account that earns 5.375% interest for 7 years. If the interest is compounded continuously, how much money will Jesse have at the end of the 7 years? 6.Jessica has earned $24800 from the sales of her books. She wants to invest the money in an account that earns 3.5% interest for 10 years. If the interest compounds continuously, how much will Jessica have in her account after 10 years?

Exponential Word Problem Practice Part 2 7. Kaitlyn has $2900 in credit card debt. Her credit card charges 11.75% interest, compounded continuously. How much will she owe on the balance if she does not make a payment for: a. 9 months?b. 2 years? c. 4 years? 8. Justin has $4200 in credit card debt. His card has an interest rate of 12.25% compounded continuously. How much would he owe if he didn’t pay on the balance for: a. 6 months?b. 1year? c. 3 years? 9.Jane needs to make $6300 to help pay for a car. She is investing some money in an account that earns 4.125% interest that is compounded continuously. How much money must she invest if she is willing to wait: a. 3 years?b. 5 years? 10. Kristen needs $2900 to pay for a computer. She is investing some money she has saved in an account that earns 3.875% compounded continuously. How much does she need to invest if she can wait: a. 2 years? b. 6 years? 11.Jeremy needs $4200 to help put down money on a house. He is investing some money in an account that earns 5.25% interest, compounded continuously. How much does he need to invest to reach his goal if he can wait: a. 4 years? b. 8 years? 12. Andrea needs $10000 to help pay off some debts. She is investing some money in an account that earns 3.125% interest, compounded continuously. How much would she need to invest to reach this goal if she can wait: a. 5 years? b. 10 years?

Ticket out the door Exponential word problems part 2 1. Mark has $2400 to invest. He can get an account for 5 years that earns 3.875% interest, compounded continuously. How much would he earn at the end of the 5 years? 2.Michelle has $7200 she wants to invest. She can get an account earning 3.125% interest for 4 years. If the interest is compounded continuously, how much would Maggie have in her account at the end of the 4 years? 3.Jeremy needs $7500 to put down on a car. If he can get an account earning 3.75% interest compounded continuously, how much would he need to invest if he could wait 3 years? 4.Peg needs to make $5400 to put towards a down payment on a house. If she can get an account earning 5.25% interest compounded continuously, how much would she need to invest if she can wait 5 years?