1. The Five Step Method
a. Ask the question
b. Select the modeling approach
c. formulate the model
d. solve the model
e. answer the question
The Pig Problem. A pig weighing 200 pounds gains 5 pounds per day and costs 45 cents a day to keep. The mortket price for pigs is 65 cents per pound, but is falling 1 cent per day. When should the pig be sold?
2. Use formula P = P () (1 + R/k)^ kt where r= interest rate k= compounding frequency per year t= time in yeras p() = initial amount of money
A $50 Series EE U.S. Government Bond compounding quarterly was issued on 5-16-01 with a P () = present value = initial amount of $25.
If the value was $38 on 8-23-10, what is the interest rate?
When will the bond be valued at $50?
Estimate the doubling time with the Rule of 72.