3.

1 Exponential Functions & Applications

Part 2

The number e is a famous irrational number. Its first few digits are:
2.7182818284590452353602874713527 (and more ...)

This constant is often used in applications involving compound interest, as well as, growth and decay.

e is called the natural base. The function f (x) = e x is called the natural exponential function.

Complete the table of values and sketch the graph of f (x) = e x .

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f(x)

Compound Interest

Suppose a principal P is invested at an annual interest rate r, compounded once a year. If the interest
is added to the principal at the end of the year, then new balance is P1

Let P be $100.00 and r be a 5% rate. Then


Compound Interest Formulas
After t years, the balance A in an account with principal P and annual interest rate r (in decimal form)
is given by the following formulas:
nt
r

1. n compoundings per year: A = P 1 +

n
2. continuous compoundings: A = Pert

Applications
1. A total of $1000 is invested at an annual interest rate of 4%. Find the balance after 10 years if it is
compounded:

a. yearly
c. monthly








b. quarterly
d. continuously










2. A deposit of $5000 is made in a trust fund that pays 7.5% interest, compounded continuously. It is
specified that the balance will be given to the college from which the donor graduated after the
money has earned interest for 50 years. How much will the college receive?








3. The population P (in millions) of Russia from 1996 to 2004 can be approximated by the model
P = 152.26e0.0039t , where t represents the year, with t=6 corresponding to 1996.

a. According to the model is the population of Russia increasing or decreasing? Explain.


b. Find the population of Russia in 2002.




c. Use the model to predict the population of Russia in 2014.

3.2 Continued
Transformations of Graphs of Logarithmic Functions

Examples: Sketch (Remember H-R-V)

1. y = log x



















3. y = log x 1




















5. y = log(x)






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2. y = log(x 1)

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4. y = log x

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6. y = log(x 1) + 4

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Example: Evaluate

ln2

ln0.3

ln(-1)

ln(1+ 2 )


Properties of Natural Logarithms

1. ln1 = 0

2. ln e = 1

3. ln e x = x

4. eln x = x

5. If ln x = ln y, then

Examples: Simplify

1
1. ln




e



ln1
3.





3



Example: Sketch

1. y = ln(x + 1)

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2. eln 5

4. 2 ln e

2. 2 ln x

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