§0.5 Exponents and Power Functions
Section Outline • Exponent Rules • Applications of Exponents • Compound Interest
Applications of Exponents EXAMPLE Use the laws of exponents to simplify the algebraic expression. SOLUTION This is the given expression.
Applications of Exponents CONTINUED Subtract. Divide.
Compound Interest - General EXAMPLE (Quarterly Compound) Assume that a $500 investment earns interest compounded quarterly. Express the value of the investment after one year as a polynomial in the annual rate of interest r. SOLUTION Since interest is not being compounded annually, we must use this formula. Replace P with 500, m with 4 (interest is compounded 4 times each year), and t with 1 (interest is being compounded for 1 year). Simplify.