Lux Investing

How do you write the exponential growth function?

The question was: If $5000 is invested at an interest rate k, compounded continuousy and grow to $6953.84 in 6 years. I got the interest rate at k = 5.5% From 6953.84 = 5000 e ^k(6) 6953.84/5000 = e^(6k) ln (6953.84/5000) = ln e^(6k) = 6k ln e ln (6953.84/5000) =6k k = 1/6 ln (6953.84/5000) k = 0.054976 or rounded k=0.055 (3d.p.) k = 5.5% What and how do you write the exponential growth function? Is it in this answer already?

Public Comments

1. 5000e^(.055*t)
2. Exponential growth function y = A e^(kt) In your example y(given) = 6953.84 >> variable growth function (bacteria, interest, etc.) A = 5000 k (worked out) = 0.055 t = independent variable (time) So your growth function: y = 5000 e^(0.055t)