Set 15: Exponential Functions

Choice A is correct. Choice A is the correct answer. Solve for $r$ when $A = 3 P$. 1. Equation: $3P = Pe^{20 r}$. 2. Simplify: $3= e^{20 r}$. 3. Take natural log: $\ln(3) = 20 r$. 4. Solve: $r = \frac{\ln(3)}{20} = \frac{1.0986}{20} \approx 0.055 = 5.5\%$. Strategic Tip: Use logarithms to solve for the exponent in exponential equations. Choice B is incorrect because this rate would more than triple the investment. Choice C is incorrect because 15% is too high. Choice D is incorrect because 3% is too low to triple in 20 years.