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Chapter 2: Exponential Function and Natural Logarithm Function With Applications To Business Section 2.3. The Natural Logarithm Function

The document discusses the natural logarithm function ln(x) and its properties. It defines logarithms and notes that ln(x) and ex are inverse functions of each other. Examples are provided to demonstrate using properties of logarithms to simplify expressions and solve equations involving exponential and logarithmic functions. Applications to modeling growth and decline using exponential functions are also discussed.

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John McCrea
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65 views

Chapter 2: Exponential Function and Natural Logarithm Function With Applications To Business Section 2.3. The Natural Logarithm Function

The document discusses the natural logarithm function ln(x) and its properties. It defines logarithms and notes that ln(x) and ex are inverse functions of each other. Examples are provided to demonstrate using properties of logarithms to simplify expressions and solve equations involving exponential and logarithmic functions. Applications to modeling growth and decline using exponential functions are also discussed.

Uploaded by

John McCrea
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CHAPTER 2: EXPONENTIAL FUNCTION AND

NATURAL LOGARITHM FUNCTION WITH


APPLICATIONS TO BUSINESS
Section 2.3. The Natural Logarithm Function

Definition: A logarithm is the power to which a base must be raised in order


to yield a given number:
x = by ⇔ logb x = y
We are interested in a very special logarithm function known as the natural
logarithm function, and denoted by loge x or ln(x) :
x = ey ⇔ loge x = ln x = y.
What does the graph of f (x) = ln(x) look like?

We will calculate ln(x) for certain values of x and plot its graph.

1 1
x ... −1 0 100
1 2
2
3 ...
ln x ... E E −4.6 −0.7 0 0.7 1.1 . . .

What does its graph look like?

There are a few features to note here:


• The domain of f (x) = ln(x) is every value of x greater than 0, in other
words, the domain of ln(x) consists of all positive real numbers. We
can’t get the natural logarithm of a negative number or zero.
• The range of ln x is given by (−∞, ∞).
• ln(x) is an increasing function.

1
When working with the natural logarithm function, it is important to know
the following properties:

Properties of Natural Logarithm Function:

L1: ln(xy) = ln x + ln y for all x, y > 0.

L2: ln(x/y) = ln x − ln y for all x, y > 0.

L3: ln(1/y) = − ln y for all y > 0.

L4: ln xy = y ln x for all x > 0.

L5: ln 1 = 0.

Test yourself: Using the properties above, can you simplify each of the
following expressions (that is, write them in their simplest form):

(a) ln 2 + ln 3 =

(b) 6 ln 2 =

(c) ln 2 − ln 1 =

(d) ln 4 + 2 ln 2 =

(e) ln(1/3) =

What is the connection between ex and ln x?

The functions ln x and ex are what we call inverses of each other. This means
that
ln ex = x for all x ∈ R
and
eln x = x for all x > 0.
In other words, if we take any number, call it x, and calculate ex and then cal-
culate ln(ex ), we end right back with x again. You can check this on your cal-
culator. For example let x = 3. Then e3 = 20.085537. Now ln(20.085537) = 3.

2
Similarly, if we take any positive number x, and calculate ln x and then
calculate eln(x) , we end up back with x again. For example, take x = 3. Then
ln(3) = 1.0986123 and e1.0986123 = 3.
Think of ln x and ex as being the Yin and Yang of mathematics - they
sort of do the opposite of each other. Also, so inseparable are they, that they
usually share the same button on the calculator...ahhhh. Word of warning
though!! Don’t confuse the ln button on your calculator with log button –
this refers to log to the base 10.

We use the fact that ln x and ex are inverses of each other, along with the
properties of the exponential and natural logarithm functions to tackle the
following exercises:

Example 1: Simplify ln e2 e3 .

Solution:

ln(e2 e3 ) = ln e5 (using E1)


= 5. 2

Example 2: Simplify eln 2−ln 3 .

Solution:

eln 2−ln 3 = eln(2/3) (using L2)


= 2/3. 2

Example 3: Simplify e−3 ln x .

Solution:
−3
e−3 ln x = eln(x ) (using L4)
= −3. 2

Example 4: Solve the following for q: ln(q + 1) = 5p.

Solution:

ln(q + 1) = 5p
⇒ eln(q+1) = e5p
⇒q+1 = e5p
⇒q = e5p − 1. 2

3
Example 5: Solve the following for t: 100e4t = 200.

Solution:

100e4t 200 =
⇒ e4t 2 =
⇒ ln(e4t )ln 2=
⇒ 4t ln 2=
ln 2
⇒t = = 0.173. 2
4
Finally let us return to the two examples at the end of Section 2.1.

Example 1. An economy is forecast to grow continuously so that the gross


national product (GNP), measured in billions of euro, after t years is given
by
GN P = f (t) = 80e0.02t .

(a) What is the GNP forecast to be after 3 years?

(b) After how many years is the GNP forecast to be e90 billion?

Solution. (a) Answer: GNP is forecast to be e84.95 billion after three years.

(b) We want to know when GN P = 90, that is, for what values of t does

80e0.02t = 90?

We want to solve for t :

80e0.02t = 90
⇒ e0.02t = 90/80 = 9/8
⇒ ln(e0.02t ) = 0.02t = ln(9/8)
ln(9/8)
⇒ t= = 5.9.
0.02
Therefore after 5.9 years, GNP is forecast to be e90 billion. 2

4
Example 2. During a recession, a firm’s revenue declines continuously so
that the total revenue, T R, (measured in millions of euro), in t years is given
by
T R = f (t) = 5e−0.15t .

(a) Calculate the current revenue and also the revenue in two years time.

(b) After how many years will the revenue decline to e2.5 million?

Solution. (a) Answer: Current revenue is is e5,000,000 and revenue will


decline to e3,705,000 after two years.

(b) For what values of t does 5e−0.15t = 2.5? We want to solve for t :

5e−0.15t = 2.5
⇒ e−0.15t = 2.5/5 = 0.5
⇒ ln(e−0.15t ) = −0.15t = ln(0.5)
ln(0.5)
⇒ t= = 4.62.
−0.15
After 4.6 years revenue will decline to e2,500,000. 2

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