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MHDQ256-Ch08 MHDQ256-Smith-v1.cls December 16, 2010 21:19
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CONFIRMING PAGES
500 CHAPTER 8
..
First-Order Differential Equations 8-10
32. One of the authors bought a set of basketball trading cards in
1985 for $34. In 1995, the “book price” for this set was $9800.
(a) Assuming a constant percentage return on this investment,
find an equation for the worth of the set at time t years (where
t = 0 corresponds to 1985). (b) At this rate of return, what
would the set have been worth in 2005? (c) The author also
bought a set of baseball cards in 1985, costing $22. In 1995,
this set was worth $32. At this rate of return, what would the
set have been worth in 2005?
............................................................
33. Suppose that the value of a $40,000 asset decreases at a con-
stant percentage rate of 10%. Find its worth after (a) 10 years
and (b) 20 years. Compare these values to a $40,000 asset that
is depreciated to no value in 20 years using linear depreciation.
34. Suppose that the value of a $400,000 asset decreases (depreci-
ates) at a constant percentage rate of 40%. Find its worth after
(a) 5 years and (b) 10 years. Compare these values to a $40,000
asset that is depreciated to no value in 10 years using linear
depreciation.
Exercises 35–38 involve tax rates.
35. In 1975, income between $16,000 and $20,000 was taxed at
28%.In 1988, income between$16,000 and $20,000wastaxed
at 15%. This makes it seem as if taxes went down considerably
between 1975 and 1988. Taking inflation into account, briefly
explain why this is not a valid comparison.
36. To make the comparison in exercise 35 a little fairer, note that
income above $30,000 was taxed at 28% in 1988 and assume
that inflation averaged 5.5% between 1975 and 1988. Adjust
$16,000 for inflation by computing its value after increasing
continuously at 5.5% for 13 years. Based on this calculation,
how do the tax rates compare?
37. Supposetheincome taxstructureisasfollows:thefirst$30,000
is taxed at 15%, the remainder is taxed at 28%. Compute the
tax T
1
on an income of $40,000. Now, suppose that inflation
is 5% and you receive a cost of living (5%) raise to $42,000.
Compute the tax T
2
on this income. To compare the taxes, you
should adjust the tax T
1
for inflation (add 5%).
38. In exercise 37, the tax code stayed the same, but (adjusted for
inflation) the tax owed did not stay the same. Briefly explain
why this happened. What could be done to make the tax owed
remain constant?
............................................................
39. Using the bacterial population data at the beginning of this
section, define x to be time and y to be the natural logarithm
of the population. Plot the data points (x, y) and comment on
how close the data are to being linear. Take two representative
points and find an equation of the line through the two points.
Then find the population function p(x) = e
y(x)
.
40. (a) As in exercise 39, find an exponential model for the popu-
lation data (0, 10), (1, 15), (2, 22), (3, 33) and (4, 49). (b) Find
an exponential model for the population data (0, 20), (1, 16),
(2, 13), (3, 11) and (4, 9).
41. Usethe method of exercise39 to fitan exponential model to the
following data representing percentage of the U.S. population
classified as living on rural farms (data from the U.S. Census
Bureau).
Year 1960 1970 1980 1990
% Pop. Farm 7.5 5.2 2.5 1.6
42. Usethe method of exercise39 to fitan exponential model to the
following data representing percentage of the U.S. population
classified as living in urban areas (data from the U.S. Census
Bureau).
Year 1960 1970 1980 1990
% Pop. Urban 69.9 73.5 73.7 75.2
43. Show that for any constant c, y = x −
1
2
+ ce
−2x
is a solution
of the differential equation y
+ 2y = 2x.
44. Show that for any constant c, y =
√
3x
2
+ c is a solution of
the differential equation y
= 3x/y.
APPLICATIONS
45. An Internet site reports that the antidepressant drug amitripty-
line has a half-life in humans of 31–46 hours. For a dosage of
150 mg, compare the amountsleft in the bloodstream after one
dayfor a person for whom the half-life is 31 hours versusa per-
sonforwhomthe half-life is 46hours.Isthisalargedifference?
46. It is reported that Prozac
®
has a half-life of 2to 3 daysbut may
be found in your system for several weeks after you stop taking
it. What percentage of the original dosage would remain after
2 weeks if the half-life is 2 days? How much would remain if
the half-life is 3 days?
47. Theantibioticertapenemhas a half-lifeof4hours in thehuman
bloodstream. The dosage is 1 gm per day. Find and graph the
amount in the bloodstream t hours after taking it (0 ≤ t ≤ 24).
48. Compare your answer to exercise 47 with a similar drug that
is taken with a dosage of 1 gm four times a day and has a
half-life of 1 hour. (Note that you will have to do four separate
calculations here.)
49. A bank offers to sell a bank note that will reach a maturity
value of $10,000 in 10 years. How much should you pay for it
now if you wish to receive an 8% return on your investment?
(Note: This is called the present value of the bank note.) Show
that in general, the present valueof an itemworth $P in t years
with constant interest rate r is given by $Pe
−rt
.
50. Suppose that the value of a piece of land t years from now is
$40,000e
2
√
t
. Given 6% annual inflation, find t that maximizes
the present value of your investment: $40,000e
2
√
t−0.06t
.
51. Suppose that a business has an income stream of $P(t) per
year. The present value at interest rate r of this income for the
next T years is
T
0
P(t)e
−rt
dt. Compare the present values at
5% for three people with the following salaries for 3 years:
A: P(t) = 60,000; B: P(t) = 60,000 + 3000t; and
C: P(t) = 60,000e
0.05t
.