Exponential Modeling and Logarithms

Lesson 4

Math

Unit 5

11th Grade

Lesson 4 of 16

Objective


Define and use $$e$$ in continuous compounding situations.

Common Core Standards


Core Standards

  • A.SSE.B.3.C — Use the properties of exponents to transform expressions for exponential functions. For example the expression 1.15t can be rewritten as (1.151/12)12t ˜ 1.01212t to reveal the approximate equivalent monhly interest rate if the annual rate is 15%.
  • F.BF.A.1.A — Determine an explicit expression, a recursive process, or steps for calculation from a context.

Criteria for Success


  • Explain that as compounding becomes more frequent, the effective interest rate increases.
  • Explain that as compounding becomes more frequent, the rate of growth approaches $$e$$.
  • Identify the growth rate using the base e and model situations using continuous growth.
  • Change the form of an exponential function to suit a context.
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Anchor Problems

25-30 minutes


Problem 1

A man is investing $100 at (the absurd) interest rate of 100% interest. He is exploring how the rate of annual return changes as the rate of compounding, $$n$$, becomes more and more frequent. Write a table of values that shows the growth rate for $$\left ( 1+{1\over n} \right )^{nt}$$ as $$n$$ approaches infinity.

Number of Times Compounding per Year, $$n$$ Growth Rate $$\left ( 1+{1\over n}^{n} \right )$$
1  
2  
4  
   
   
   

 

Guiding Questions

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References

Illustrative Mathematics Compounding Interest with a 100% Interest Rate

Compounding Interest with a 100% Interest Rate, accessed on Feb. 22, 2018, 3:03 p.m., is licensed by Illustrative Mathematics under either the CC BY 4.0 or CC BY-NC-SA 4.0. For further information, contact Illustrative Mathematics.

Problem 2

Four physicists describe the amount of a radioactive substance, $$Q$$ in grams, left after $$t$$ years:

a.    $$Q=300e^{-0.0577t}$$

b.    $$Q=300(1/2)^{t/12}$$

c.    $$Q=300 \cdot 0.9439^t$$

d.    $$Q=252.290 \cdot 0.9439^{t-3}$$

  1. Show that the expressions descriing the radioactive substance are all equivalent (using appropriate rounding).
  2. What aspect of the decay of the substance does each of the formulas highlight?

Guiding Questions

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References

Illustrative Mathematics Forms of Exponential Expressions

Forms of Exponential Expressions, accessed on Feb. 22, 2018, 3:04 p.m., is licensed by Illustrative Mathematics under either the CC BY 4.0 or CC BY-NC-SA 4.0. For further information, contact Illustrative Mathematics.

Target Task

5-10 minutes


Suppose $5,000 is put into an account that pays 4% compounded continuously. How much will be in the account after 3 years?

Additional Practice


The following resources include problems and activities aligned to the objective of the lesson that can be used for additional practice or to create your own problem set.

  • Include problems using given information to find the value compounded at different amounts of time per year and continuously. 
  • Explain where the value $$e$$ comes from. 
  • Include problems manipulating equations to show values of interest (like in Anchor Problem #2).

Next

Describe the derivation of the formula for the sum of a finite geometric series and use it to solve problems.

Lesson 5
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Lesson Map

A7CB09C2-D12F-4F55-80DB-37298FF0A765

Topic A: Modeling with and Interpreting Exponential Functions

Topic B: Definition and Meaning of Logarithms

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