GEST 1001 - SOLUTIONS

Lecture 1 – Linear and Quadratic functions

1. (a) Denominator is 0 when

x2 − 6 x + 5 = 0
( x − 1)( x − 5) = 0
x = 1, 5

Domain: all real numbers except 1 and 5.

(b) For x to be real, x must be nonnegative.

For the denominator x – 1 to be different from 0, x cannot be 1.

Both conditions are satisfied by all nonnegative numbers except 1.

Domain: all nonnegative real numbers except 1.

−3 − (−2) −1 1
2. Slope = m = = =−
8−6 2 2

1
3. (a) y − 5 = − [ x − (−5)]
2
2( y − 5) = −( x + 5)
2 y − 10 = − x − 5
x + 2y − 5 = 0

1
(b) y = − x−3
2
 1 
2 y = 2  − x − 3
 2 
2 y = −x − 6
x + 2y + 6 = 0

4. Let x = the time (in years) and y = the price per share. Then,
In 1996: x1 = 1996 and y1 = 37 ;
In 2006: x2 = 2006 and y2 = 8
8 − 37 −29
The slope is: m = = = −2.9
2006 − 1996 10
The stock price dropped an average of $2.90 per year.

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5. The owner’s profits increased as a function of time. Let x = the time (in years) and let
y = the profit (in dollars). The given points are ( x1, y1 ) = (0, − 100,000) and
( x2 , y2 ) = (5, 40,000) .
y −y 40, 000 − (−100, 000) 140, 000
m= 2 1 = = = 28,000
x2 − x1 5−0 5
Using the point-slope form with m = 28,000 and ( x1, y1 ) = (0, − 100,000) gives
y − y1 = m ( x − x1 )
y − (−100, 000) = 28, 000( x − 0)
y + 100, 000 = 28, 000 x
y = 28, 000 x − 100, 000

6. s = h(t ) = t 2 + 6t + 9

a = 1, b = 6, c = 9
b 6
Vertex: − =− = −3
2a 2 1

h(−3) = (−3) 2 + 6(−3) + 9 = 0

Vertex = (–3, 0)
s-intercept: c = 9

t-intercepts: t 2 + 6t + 9 = (t + 3)2 = 0 , so t = –3.

7. In the quadratic function P( x) = − x 2 + 18 x + 144, a = –1, b = 18, and c = 144.

Since a < 0, the graph of the function is a parabola that opens downward.
b 18
The x-coordinate of the vertex is − =− = 9.
2a 2(−1)

( )
The y-coordinate of the vertex is P(9) = − 92 + 18(9) + 144 = 225 .

Thus, the vertex is (9, 225). Since c = 144, the y-intercept is (0, 144). To find the x-intercepts, let
y = P(x) = 0.
0 = − x 2 + 18 x + 144

(
0 = − x 2 − 18 x − 144 )
0 = –(x – 24)(x + 6)
Thus, the x-intercepts are (24, 0) and (–6, 0).

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Lecture 2 – Applications of Linear and Quadratic functions (1)

1. The points (60, 15.30) and (35, 19.30) lie on the graph of the function, which is a line.
19.30 − 15.30 4
m= =− .
35 − 60 25
4 4
Hence an equation of the line is p − 15.30 = − (q − 60) , which can be written p = − q + 24.9.
25 25
4
When q = 40, then p = − (40) + 24.9 = $18.50.
25

740 − 940
2. The line passes through (3000, 940) and (2200, 740), so m = = 0.25.
2200 − 3000
Then, p – 740 = 0.25(q – 2200) or p = 0.25q + 190.

3. (a) Equating p-values gives

2 3
q+3= − q + 11
100 100
5
q =8
100
q = 160

2
p= (160) + 3 = 6.2
100

The equilibrium point is (160, 6.2).

(b) Equating p-values gives 20 − q = q + 10 . Squaring both sides gives 400 − 40q + q 2 = q + 10

q 2 − 41q + 390 = 0

(q – 26)(q – 15) = 0
Thus q = 26, 15. If q = 26, then p = 20 – q = 20 – 26 = –6. But p cannot be negative.
If q = 15, then p = 20 – q = 20 – 15 = 5. The equilibrium point is (15, 5).

3q − 200 p + 1800 = 0, (1)

4. 
3q + 100 p − 1800 = 0. (2)

Subtracting Eq. (2) from Eq. (1) gives

–300p + 3600 = 0
p = $12

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Lecture 3 – Applications of Linear and Quadratic functions (2)

1. Since profit = total revenue – total cost, then 4600 = 8.35q – (2116 + 7.20q).
Solving gives 4600 = 1.15q – 2116
1.15q = 6716
6716
q= = 5840 units
1.15
For a loss (negative profit) of $1150, we solve −1150 = 8.35q – (2116 + 7.20q). Thus
–1150 = 1.15q – 2116
1.15q = 966
q = 840 units
To break even, we have total revenue equals total cost, or
8.35q = 2116 + 7.20q
1.15q = 2116
q = 1840 units

3. Let q = break-even quantity.

Since total revenue is 5q, we have 5q = 200,000, which yields q = 40,000.
Let v be the variable cost per unit. Then at the break-even point,
Total Revenue = Total Cost
= Variable Cost + Fixed Cost.
Thus, 200,000 = 40,000v + 40,000
160,000 = 40,000v
v = $4.

3. Let r be the manufacturer’s total revenue.

Then r = pq = (200 − 2q)q = 200q − 2q 2 , which is a quadratic function with a = –2, b = 200, c = 0.

b 200
Since a < 0, r has a maximum value when q = − =− = 50 units.
2a −4
If q = 50, then maximum revenue = r = [200 – 2(50)](50) = $5000.

4. a. Let x be the no. of mobile phones produced and sold.

C ( x) = 900 x + 580000
R( x) = 1700 x
P( x) = R( x) − C ( x) = 1700 x − (900 x + 580000) = 800 x − 580000

b. Break-even point occurs when P(x) = 0,

set P(x) = 0, we have 800 x − 580000 = 0  x = 725 mobile phones.
 Break-even point occurs when 725 mobile phones are produced and sold.
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5. a. Let R(q) be the manufacturer’s total revenue.
Then R(q) = pq = (6 − q)q = 6q − q 2 , which is a quadratic function with a = –1, b = 6, c = 0.
b 6
Since a < 0, R(q) has a maximum value when production level = q = − =− = 3 units.
2a 2(−1)

If q = 3, then maximum revenue = R(3) = 6(3) − (3) 2 = 9 dollars

b. P(q) = R(q) − C (q) = (6q − q 2 ) − (5 + 2q) = −q 2 + 4q − 5

The profit function is a quadratic function with a = –1, b = 4, c = −5.
b 4
Since a < 0, P(q) has a maximum value when production level = q = − =− = 2 units.
2a 2(−1)

c. Break-even point occurs when P(x) = 0,

set P(x) = 0, we have − q 2 + 4q − 5 = 0
However, the above equation does not have any real root since.
b 2 − 4ac = (4) 2 − 4(−1)(−5) = −4  0
Furthermore, the vertex of the profit function occurs at (2, P(2)) = (2, −1).
This means that the profit is always negative as the graph of the profit function is an open-
downward parabola with a maximum point at (2, −1).
Therefore, the break-even point does not exist.

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Lecture 4 – Exponential functions and Lecture 5 – Logarithmic functions

1. a. N = 400e 0.05t
b. When t = 1, then N = 400e 0.05(1) = 420.51  421 bacteria
c. When t = 4, then N = 400e 0.05( 4) = 488.56  489 bacteria
d. Set 2  400 = 400e 0.05t  2 = e 0.05t  ln( 2) = 0.05t  t = 13.86 hours
e. Set 3  400 = 400e 0.05t  3 = e 0.05t  ln(3) = 0.05t  t = 21.97 hours

2. P = 350000e −0.015t where P is the population after t years.

When t = 3, P = 350000e −0.015(3)  334,599 persons

3. a. When t = 0, N = 12e−0.031(0) = 12 1 = 12.

b. When t = 10, N = 12e−0.031(10) = 12e−0.31 = 8.8.
c. When t = 44, N = 12e−0.031(44) = 12e−1.364  3.1.
1 1 1
d. Set  12 = 12e −0.031t  = e −0.031t  ln   = −0.031t  t = 22.36 hours
2 2 2

2
1 1 1 1 1
4. After one half-life, gram remains. After two half-lives,  =   = gram remains.
2 2 2 2 4
n 3
1 1 1
Continuing in this manner, after n half-lives,   gram remains. Because =   , after 3
2 8 2

1
half-lives, gram remains. This corresponds to 3  9 = 27 years.
8

5. a. When p = 10, then q = 10, 000(0.95123)10  6065 .

b. Set 0.95123 = e− x  ln( 0.95123) = − x  x = 0.05

( )
p
q = 10, 000(0.95123) p  10, 000 e−0.05 . = 10,000e−0.05 p

c. q = 10, 000e−0.05(10)  6065 .

6. P = 1,500,000e 0.03t
If P = 2,000,000, then 2,000,000 = 1,500,000e 0.03t . Solving for t gives
2,000,000 4 4
= e 0.03t  = e 0.03t  ln   = 0.03t  t = 9.59 years
1,500,000 3 3

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Lecture 6 – Mathematics of Finance
12
 0.02 
1. 6500 1 +   $6900.91
 4 

2. Set 2  2000 = 2000(1 + 0.099) t  2 = 1.099t  ln( 2) = t ln(1.099)  t = 7.34 years.

It takes 7.34 years for the amount to double.
Therefore, it takes a full 8 years for the amount to at least double.
0.06
3. Quarterly rate = = 0.015
4
6.5 years = 26 quarters

a. 2600(1.015)26  $3829.04

b. 3829.04 – 2600 = $1229.04

 1 
4. 12 1 %  = 14%
 6 

5. a. A nominal rate compounded yearly is the same as the effective annual rate, so the effective
annual rate is 10%.
2
 0.10 
b. 1 + 2  − 1 = 0.1025 or 10.25%
 
4
 0.10 
c. 1 + 4  − 1  0.10381 or 10.381%
 
12
 0.10 
d. 1 + 12  − 1  0.10471 or 10.471%
 
365
 0.10 
e. 1 + 365  − 1  0.10516 or 10.516%
 

6. 6000(1.08)7  $10, 282.95

7. a. (0.015)(12) = 0.18 or 18%

b. (1.015)12 − 1  0.1956 or 19.56%

8. 7.8% compounded semiannually is equivalent to an effective annual rate of

(1.039)2 − 1 = 0.079521 or 7.9521%.

Thus 8% compounded annually, which is the effective annual rate, is the better rate.

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 −12
 0.053 
9. 12, 000 1 +  $11,381.89
 12 

10. 27, 000(1.03)−22  $14, 091.10

11. Let x be the payment two years from now. The equation of value at year 2 is:
600 800
x= 2
+ 4
 0.08   0.08 
1 +  1 + 
 2   2 

x = $1238.58

12. We consider the value of each investment at the end of eight years.

The savings account has a value of 10, 000(1.03)16  $16, 047.06.

The business investment has a value of $16,000.

Thus, the better choice is the savings account.

13. Let X be the present value.

150 150 150 175 175 175

X = + + ... + + + + ... +
 0.04   0.04  2  0.04 
8
 0.04 
9
 0.04 
10
 0.04 
32
1 +  1 +   1 +   1 +   1 +   1 + 
 12   12   12   12   12   12 
 
8   
24 
     
150 1 175  1  − 1
  − 1
 0.04   1 + 0.04    0.04  9  1 + 0.04  
1 +  


  1 +   12

 
 12   12   12   
= +  $5106.27
1 1
−1 −1
0.04 0.04
1+ 1+
12 12

14. Let x be the quarterly payment.

x x x
15000 = + + ... +
 0.04   0.04  2  0.04 
12
1 +  1 +  1 + 
 4   4   4 

x  1     1 12 
12
  − 1 x 1 −   
1.01  1.01     1.01  
15000 = =  x = $1332.73
1 0.01
−1
1.01

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15. a. Periodic rate = i = 0.06 /12 = 0.005

Amount after 4 years = 50(1 + 0.005) 47 + 50(1 + 0.005) 46 + ... + 50 =

 
50 (1.005)48 − 1
= $2704.89
1.005 − 1
Amount after 6 years = 2704.89(1 + 0.005) 24 = $3048.85

b. Amount of compound interest = $3048.85 – 48($50) = $648.85

16. Amount needed in 10 years’ time = Difference between the replacement cost and the salvage
value  $52,000 – $4,000 = $48,000
Let x be the equal annual payment.

x(1 + 0.07 )9 + x(1 + 0.07) 8 + ... + x =

 
x (1.07 )10 − 1
= $48,000  x = $3474.12
1.07 − 1

Lecture 7 – Differentiation 1 (Derivative and Rules of differentiation)

1. a. ( )
g ( p) = 4 p 4−1 − 3 3 p3−1 − 0 = 4 p3 − 9 p 2

9
b. h( x ) = 4 x 4 + x 3 − x 2 + 8 x
2

( ) 9
h( x) = 4 4 x 4−1 + 3x3−1 − (2 x) + 8(1)
2

= 16 x3 + 3x 2 − 9 x + 8
1
 1 −2  −2
c. f (r ) = 6r 3 , f (r ) = 6  r 3  = 2r 3
3 
1 1 1 −2 / 3
d. q( x) = = = x
3 3 2 2/3 2
8 x 2x

1 2  1
q( x) =  − x −5 / 3  = − x −5 / 3
2 3  3

e. ( )
f ( x) = x 3x 2 − 10 x + 7 = 3x3 − 10 x 2 + 7 x

f ( x) = 9 x 2 − 20 x + 7

− 23 1 − 23
f. v( x) = x ( x + 5) = x 3 + 5 x

1 − 23 10 − 53 1 − 53
v( x) = x − x = x ( x − 10)
3 3 3

g. f ( x) = ( x − 1)( x + 2) = x 2 + x − 2

f ( x) = 2 x + 1

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 x 2 + x3 x2 x3
h. w( x) = = + = 1+ x
x2 x2 x2
w( x) = 0 + 1 = 1

3q 2 + 4q − 2 3q 2 4q 2
i. f (q) = = + −
q q q q2
= 3q + 4 − 2q −1

2
f (q ) = 3(1) + 0 − 2(−q −2 ) = 3 + 2q −2 = 3 +
q2

j. f ( z) =
( )
z 1z − (ln z )(1)
=
1 − ln z
2
z z2

k. ( )( ) (
y = x 2 − 1 9 x 2 − 6 + 3x3 − 6 x + 5 (2 x) − 4(8 x + 2) )
= 9 x 4 − 15 x 2 + 6 + 6 x 4 − 12 x 2 + 10 x − 32 x − 8 = 15 x 4 − 27 x 2 − 22 x − 2

l. ( )
f (r ) = 3r 2 − 4 (2r − 5) + r 2 − 5r + 1 (6r ) ( )
= 6r 3 − 15r 2 − 8r + 20 + 6r 3 − 30r 2 + 6r = 12r 3 − 45r 2 − 2r + 20

m. y = 70 x3 − 43x 2 − 276 x − 135

y = 210 x 2 − 86 x − 276

3x 2 − x − 1 3x 2 − x − 1 5 2 − 13
n. y= = 1
= 3x 3 − x 3 − x
3
x x3
2 2 −1 1 − 4 2 2 1 15 x 2 − 2 x + 1
y = 5 x 3 − x 3 + x 3 = 5 x 3 − 1 + 4 = 4
3 3 3x 3 3x 3 3x 3
(2 x + 5)(0) − 5(2) (3x + 1)(2) − (2 x)(3)
o. y = 0 − +
(2 x + 5) 2
(3x + 1)2
10 6x + 2 − 6x
= +
(2 x + 5) 2
(3x + 1)2
10 2
= +
(2 x + 5) 2
(3x + 1)2
[( x + 2)( x − 4)](1) − ( x − 5)(2 x − 2)
p. y =
[( x + 2)( x − 4)]2

=
(
x 2 − 2 x − 8 − 2 x 2 − 12 x + 10 ) = − ( x2 −10x + 18)
[( x + 2)( x − 4)]2 [( x + 2)( x − 4)]2

q.
dy
=
(   )
e x + 1 e x  − e x − 1 e x 
  ( ) =
2e x

( ) ( e + 1)
dx 2 2
ex +1 x

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2. a. y = 4 x2 + 5x + 6

y = 8x + 5

y  x =1 = 13

An equation of the tangent line is

y – 15 = 13(x – 1), or y = 13x + 2.

1
b. y= = x −2
x2
2
y  = −2 x −3 = −
x3
2 1
y x =2 = − =−
3 4
2
An equation of the tangent line is
1 1 1 3
y− = − ( x − 2), or y = − x + .
4 4 4 4

Lecture 8 – Differentiation 2 (Instantaneous rate of change)

dy 25 32
1. = x .
dx 2

dy 25
If x = 9, = (27) = 337.50 dollars per year / year
dx 2

dT
2. = 0 + 0.27(1 − 0) = 0.27 C / C
dTe

3. c = 0.3q 2 + 3.5q + 9

dc
= 0.6q + 3.5
dq

dc
If q = 10, then = 0.6(10) + 3.5 = 9.5 dollars per unit
dq

dr
4. = 30 − 0.6q dollars per unit
dq

2
5. Position = s = . When t = 1, then s = 1 meter.
t +1
3

ds (t 3 + 1)(0) − 2(3t 2 ) 6t 2
Velocity = v = = =−
dt (t 3 + 1)2 (t 3 + 1)2

6
If t = 1, then v = − = −1.5 meters /second
4

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Lecture 9 – Differentiation 3 (Marginal analysis)
1. c = f (q) = 0.4q 2 + 4q + 5
dc
c’(q) or = 0.8q + 4
dq
If q = 2, then c’(2) = 5.6 dollars per unit
Interpretation: the total cost will be increased by 5.6 dollars if the next unit (the 3rd unit) is
produced.

2. R' (q) = 10 − 0.4q

Additional revenue by selling the 21st unit = R' (20) = 10 − 0.4(20) = 2 dollars

3. Let R(x) and C(x) be the total revenue and the total cost respectively when x units are produced
and sold.
a. R( x) = (7 − 0.001x) x = 7 x − 0.001x 2

The graph of the revenue function is an open-downward parabola with the maximum at the
vertex.
−b −7
The value of x at the vertex = = = 3500
2a 2(−0.001)

The revenue will be maximized at the production level of 3500 units.

b. R' ( x) = 7 − 0.002 x
C ' ( x) = 2 + 0.0005 x
Profit will be maximized when R' ( x) = C ' ( x)
Set R' ( x) = C ' ( x) , we have
7 − 0.002 x = 2 + 0.0005 x
x = 2000
The profit will be maximized at the production level of 2000 units.

c. Profit function: P( x) = R( x) − C ( x) = (7 x − 0.001x 2 ) − (1000 + 2 x + 0.00025x 2 )

= − 0.00125 x 2 + 5 x − 1000
Maximum profit = P(2000) = −0.00125(2000) 2 + 5(2000) − 1000 = 4000 dollars
Unit price at maximum profit = 7 – 0.001(2000) = 5 dollars

4. a. C ( x) = 48 x + 8000
C ' ( x) = 48
Rate of change in cost when the level of production is 300 recorders per month
= C ' (300) = 48 dollars / recorder

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b. Profit function: P( x) = R( x) − C ( x) = (75x − 0.01x 2 ) − (48x + 8000)
= − 0.01x 2 + 27 x − 8000
P' ( x) = −0.02 x + 27
Marginal profit when 1000 recorders are made each month
= P' (1000) = −0.02(1000) + 27 = 7 dollars / recorder

c. R' ( x) = 75 − 0.02 x
C ' ( x) = 48
Profit will be maximized when R' ( x) = C ' ( x)
Set R' ( x) = C ' ( x) , we have
75 − 0.02 x = 48
x = 1350
The profit will be maximized at the production level of 1350 recorders, so it would become
foolish to consider increasing production beyond that level.

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