Calculus II Homework

Section 10.4 Applications of Differential Equations

Problems 1, 2, 3, 4, 5

Business and Economics

1. Continuous Deposits Jessie deposits $5000 in an IRA at 6% interest compounded continuously
for her retirement in 10 years. She intends to make continuous deposits at the rate of $3000 a year until
she retires. How much will she have accumulated at that time?

2. Continuous Deposits In Exercise 1, how long will is take Jessie to accumulate $30,000 in her
retirement account?

3. Continuous Deposits To provide for a future expansion, a company plans to make continuous
deposits to a savings account at the rate of $50,000 per year, with no initial deposit. The managers want
to accumulate $500,000. How long will it take if the account earns 10% interest compounded
continuously?

4. Continuous Deposits Suppose that company in Exercise 3 wants to accumulate $500,000 in 3

years. Find the approximate yearly deposit that will be required.

5. Continuous Deposits An investor deposits $8000 into an account that pays 6% compounded
continuously, and then deigns to withdraw from the account continuously at a rate of $1200 per year.
a. Write a differential equation to describe the situation.
b. How much will be left in the account after 2 years?
c. When will the account be completely depleted?