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Math Help - Exponential Regression and percent

  1. #1
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    Oct 2009
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    Exponential Regression and percent

    The question:

    You make one charge to a new credit card but then charge nothing else and make the minimum payment each month. You can't find all of your statements, but the accompanying table shows, for those you do have, your balance B, in dollars, after you make n payments.

    Payment | n Balance B
    2 | 478.73
    4 | 440.74
    7 | 389.33
    11| 329.99

    (a) Use regression to find an exponential model for the data in the table. (Round the decay factor to four decimal places.)

    B= 520(0.9595)^n

    (b) What was your initial charge? (Round your answer to the nearest cent.)

    $ 520

    (c) For such a payment scheme, the decay factor equals (1 + r)(1 − m). Here r is the monthly finance charge as a decimal, and m is the minimum payment as a percentage of the new balance when expressed as a decimal. Assume that your minimum payment is 9%, so m = 0.09. Use the decay factor in your model to determine your monthly finance charge. (Round your answer to two decimal places.)

    (Here's where I had trouble. When I plug all the numbers into (1 + r)(1 - m) I get 1.783145. I tried putting in 1.78, 0.78, 17.83... I guess I just don't know where to put my decimal or if my answer is even correct.)
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  2. #2
    MHF Contributor
    Joined
    Mar 2007
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    1,240

    Talking

    Where, exactly, are you "plugging all the number in"?

    It looks like maybe you're supposed to find a value for r, so that (1\, +\, r)(1\, -\, 0.09) equates to the decay factor you'd found via regression...?
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