Exponential Word Problems Practice
Please read and underline the key words that indicate the use of the formula that you
will be using. Then, write the formula with the appropriate numbers plugged in and
solve using your calculator.
1. Rather than spending a few dollars each day on junk food and candy, you save
that money and at the time you graduate high school, you end up with $2000. If
you invest that money in a bond that pays 4% interest compounded quarterly, how
much would you have when you retired in 50 years?
2. The rate at which caffeine is eliminated from the bloodstream of an adult is 13%
per hour. An adult drinks a soda and the caffeine reaches a peak level of 27
milligrams. How much caffeine will remain in 2 hours?
3. It’s been said that if you have 1 million dollars, you can quit work and live off of
the interest. If your investment pays 7% interest compounded monthly, do you
believe this to be a true statement or false statement (find the amount of interest
gained in 1 year)? Why or why not?
4. Fleas reproduce in such a way that their population doubles every 16 hours. If
there are 300 fleas present now, how many will there be in 3 days?
5. A person charges $5000 worth of merchandise on a credit card that charges
18.99% interest compounded continuously. How much will the person owe (not
including late charges) if he does not pay this back for 7 years?
6. The cost of attending a certain college has been increasing at 6% each year. If it
costs $25,000 now, how much will it cost in 25 years?
7. Given the choice between the following two options, which would you rather
have: (#1) 1 million dollars or (#2) 1 penny doubled every day for a month?
Why?
8. How much money would you need to start an investment at age 18, if you would
like to have a balance of $15,000 by age 24? Assume that the interest is
compounded monthly and it earns 6% interest.