One real world application of exponential equations is in compound interest. The formula for compound interest with a finite number of calculations is an exponential equation. We can solve for a parameter of this equation, and can use logarithms to access parameters in the exponent. Students may be asked to solve compound interest problems with interest compounded biannually, monthly, or daily.
Sample Problems (7)
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You invested $3000 in an account that earns 4% interest.
Invest $5000 at 5% interest compounded quarterly.