1. Using the Power Property with Exponential Models to Make Predictions
Section 5.4
Using the Power Property
with Exponential Models
to Make Predictions

2. Using the Power Property with Exponential Models to Make Predictions
Using the Power Property to Make a Prediction
Example
A person invests $7000 in a bank account with a yearly interest rate of 6%, compounded annually. When will the balance be $10,000?
Let B = f (t) be the balance (in thousand s of dollars) after t years or a fraction thereof
Exponential model of the form f (t) = abt
B-intercept of (0, 7): $7000, when t = 0,
a = 7 and f (t) = 7bt
Solution
Section 5.4
Slide 2

3. Using the Power Property with Exponential Models to Make Predictions
Using the Power Property to Make a Prediction
Solution Continued
End of the year, account increased by 6% of previous years balance
Thus, f (t) = 7(1.06)t
To find when the balance is $10,000 (B = 10), substitute 10 for f (t) and solve for t
Section 5.4
Slide 3

4. Solution Continued Checking solution:
Using the Power Property with Exponential Models to Make Predictions
Using the Power Property to Make a Prediction
Solution Continued
Checking solution:
Section 5.4
Slide 4