SOLUTION: Hi there, can someone help me break down and solve this type of problem. The tutors at my college seem to have trouble helping with word problems, and I am in great need of unders

Click here to see ALL problems on Probability-and-statistics

Question 1130478: Hi there, can someone help me break down and solve this type of problem. The tutors at my college seem to have trouble helping with word problems, and I am in great need of understanding this before finals in a couple of weeks.

Suppose that P is invested in a savings account in which interest, k, is compounded continuously at 7% per year. The balance P(t) after time t, in years, is P(t)=Pe Superscript kt.
a) What is the exponential growth function in terms of P and 0.07?
P(t)=_____
Found 2 solutions by jim_thompson5910, josgarithmetic:
Answer by jim_thompson5910(35256) (Show Source):
You can put this solution on YOUR website!

In this case, k = 0.07 which is the decimal form of 7%

So the function turns into which is the final answer

Note: if we knew the initial deposit amount P, then we could replace this letter with that value. Eg: let's say that $300 is deposited, then that would mean in this hypothetical example that turns into . However, we aren't given the value of P, so we leave it alone.

Another note: the 'e' refers to the constant 2.718... which is similar to the constant pi = 3.14...; this constant 'e' is often found in growth rate problems

Answer by josgarithmetic(39617) (Show Source):
You can put this solution on YOUR website!
----
----
P is invested in a savings account in which interest, k, is compounded continuously at 7% per year. The balance P(t) after time t, in years, is P(t)=Pe Superscript kt.
----
----