1. Lesson 2

1.11. Explore 7

Mathematics 30-2 Module 7

Module 7: Exponents and Logarithms

 

In Try This 4 you used the formula A = 1000(1.03)n to simplify compound interest calculations. Typically, when repeated multiplication is used, an exponential function can be used to simplify the process. An exponential function can also be used to determine the length of time required to pay off a loan.



textbook

Read “Example 3” on pages 392 and 393 of the textbook. Although the equation is different from what you've worked with, the strategy for determining n is similar to what you have seen already.

 

 

Self-Check 4
  1. Complete question 11.a. on page 397 of the textbook. Answer
  2. A bandmaster borrowed $10 500 from a bank to buy new equipment, new lighting, and a new sound package. The interest rate on the loan is 3.6% per year, compounded monthly. The monthly payment on the loan is $400. The loan manager gives the bandmaster the following equation to determine how long it will take to pay off the loan:

     
    (1.003)–n = 0.92 125, where n represents the number of months
    1. Determine how long it will take the bandmaster to pay off the loan. Answer
    2. How much interest will the bandmaster pay? Answer

glossary

Add exponential equation to your copy of Glossary Terms.

 

 


formula

Add the following to your copy of Formula Sheet:

  • A = P(1 + i)n