IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

Unit 4: Number & Algebra

IB Math: Applications and Interpretations SL

4.1 Properties of Exponents & Intro to Logs .................................................................................................................................................. 2

4.1 Scientific Notations & Exponents/Logs Homework............................................................................................................................ 3
4.2 Compound Interest and Depreciation ....................................................................................................................................................... 4
4.2 Compound Interest and Depreciation Homework .............................................................................................................................. 5
4.3 Amortization and Annuity ............................................................................................................................................................................. 7
4.3 Amortization and Annuity Homework ..................................................................................................................................................... 8
4.4 Using Amortization To Analyze Home Mortgage Options.............................................................................................................. 10
4.4 Finance Review ................................................................................................................................................................................................ 12
4.5 Arithmetic Sequences & Series................................................................................................................................................................. 14
4.5 Arithmetic Sequences & Series Homework ......................................................................................................................................... 16
4.6 Geometric Sequences & Series ................................................................................................................................................................. 18
4.6 Geometric Sequences & Series Homework .......................................................................................................................................... 20

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.1 Properties of Exponents & Intro to Logs

Properties of Exponents
Let a and b be real numbers and let m and n be rational numbers, such that the quantities in each property are real
numbers.
Property Name Definition Example
! " !#"
Product of Powers 𝑎 ∙𝑎 =𝑎

Power of a Power (𝑎! )" = 𝑎!"

Power of a Product (𝑎𝑏)! = 𝑎! 𝑏!

Negative Exponents 1
𝑎$! = ,𝑎 ≠ 0
𝑎!
Zero Exponent 𝑎% = 1, 𝑎 ≠ 0

Quotient of Powers 𝑎!
= 𝑎!$" , 𝑎 ≠ 0
𝑏!
Power of a Quotient 𝑎 ! 𝑎!
+ , = ! ,𝑏 ≠ 0
𝑏 𝑏

In Class Practice

1) (5𝑥 & 𝑦)' ∙ 𝑥 2) −2𝑎' 𝑏' (−2𝑎$& 𝑏& 𝑐 % )'

& !
,&() $ *- * #"
&( ! ) " * #$
3) + , 4)
+) $ * #! .( #" ) % * $

Rewrite in exponential form.

'
a. 𝒍𝒐𝒈' 5 = 𝑐 b. 𝒍𝒐𝒈+ 16 = 2 c. 𝒍𝒐𝒈/ 512 = 30 d. 𝒍𝒐𝒈0. 8 =
+

Rewrite in logarithmicform.
$ "
a. 2( = 8 b. 4' = 64 c. 16& = 8 d. 125$ = 5

Evaluate
0
a. 𝑙𝑜𝑔& 16 b. 𝑙𝑜𝑔' 81 c. 𝑙𝑜𝑔0& 5144 d. 𝑙𝑜𝑔& /

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.1 Scientific Notations & Exponents/Logs Homework

1. Simplify each of the following.

33 = 35 ´ 3-3 = 3-3 =

æ 1 ö2 54 ´ 23 a 2b 6
ç ÷ = = =
è 3ø 22 ´ 53 b a -3b 4
2

æ 1 ö-2 æ 2 ö-2
ç ÷ =
è 3ø
ç ÷ =
è3ø
(a ) =1 =2
=

1 1 1
- -
42 = 25 2
= 4 2
=

1
a2a6 74 ´ 72 æ 25 ö 2 =
= =
7 ´ 77 ç ÷
a5 è 4 ø

2.

3.

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.2 Compound Interest and Depreciation

Key Terms
1. Simple interest

2. Compound interest

Compound Interest Formula

Calculator Instructions

N --

I% --

Examples PV --
1) Cassidy has a college fund from her parents. She was given a lump sum of
PMT --
$10,000 at age 5. The account pays 4% interest per annum. Calculate the value
of the account after one year compounded: FV --
a) quarterly b) half-yearly
P/Y --

C/Y –

Note: Incoming Cash is Positive

Outgoing Cash is Negative

What would the value of Cassidy’s account be on her 18th birthday?
a) monthly b) quarterly

2) The car you just bought for $55,000 depreciates by 18% per year. What would the value of your car be
after 10 years?

3) The housing market is recovering, so much so that the current value of your home is $350,000 and it is speculated to
appreciate by 3.5% per year. If the current trend continues, when will your home be worth $1,000,000?

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.2 Compound Interest and Depreciation Homework

1. Siân invests 50 000 Australian dollars (AUD) into a savings account which pays a nominal annual interest rate of
5.6 % compounded monthly.

a. Calculate the value of Siân’s investment after four years. Give your answer correct to two decimal places.
[3 marks]

After the four-year period, Siân withdraws 40 000 AUD from her savings account and uses this money to buy a
car. It is known that the car will depreciate at a rate of 18 % per year.

b. The value of the car will be 2500 AUD after 𝑡 years. Find the value of 𝑡. [3 marks]

2. Give your answers to parts (b), (c) and (d) to the nearest whole number.

Harinder has 14 000 US Dollars (USD) to invest for a period of five years. He has two options of how to invest the
money.
Option A: Invest the full amount, in USD, in a fixed deposit account in an American bank.

a. The account pays a nominal annual interest rate of r % , compounded yearly, for the five years. The bank
manager says that this will give Harinder a return of 17 500 USD. Calculate the value of r. [3 marks]

Option B: Invest the full amount, in Indian Rupees (INR), in a fixed deposit account in an Indian bank. The money
must be converted from USD to INR before it is invested. The exchange rate is 1 USD = 66.91 INR.

b. Calculate 14 000 USD in INR. [2 marks]

c. The account in the Indian bank pays a nominal annual interest rate of 5.2 % compounded monthly.
Calculate the amount of this investment, in INR, in this account after five years. [3 marks]

d. Harinder chose option B. At the end of five years, Harinder converted this investment back to USD. The
exchange rate, at that time, was 1 USD = 67.16 INR. Calculate how much more money, in USD, Harinder
earned by choosing option B instead of option A. [3 marks]

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number
3. Give your answers to this question correct to two decimal places.
Gen invests $2400 in a savings account that pays interest at a rate of 4% per year, compounded annually. She leaves
the money in her account for 10 years, and she does not invest or withdraw any money during this time.

a. Calculate the value of her savings after 10 years. [2 marks]

b. The rate of inflation during this 10 year period is 1.5% per year. Calculate the real value of her savings after
10 years. [3 marks]

4. In this question give all answers correct to two decimal places.

Diogo deposited 8000 Argentine pesos, ARS, in a bank account which pays a nominal annual interest rate of 15%,
compounded monthly.

a. Find how much interest Diogo has earned after 2 years. [3 marks]

b. Carmen also deposited ARS in a bank account. Her account pays a nominal annual interest rate of 17%,
compounded yearly. After three years, the total amount in Carmen’s account is 10 000 ARS.
Find the amount that Carmen deposited in the bank account. [3 marks]

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.3 Amortization and Annuity

Many loans are amortized, including car loans and home loans.

Annuity:

Amortization:

Calculator Instructions
è Payment includes principal and interest

N --

I% --

PV --

PMT --

FV --

P/Y --

C/Y –

Examples Note: Incoming Cash is Positive

Outgoing Cash is Negative

1) Sarina borrows $200,000 from the bank. The terms of the loan
are 30 years, with an annual rate of 7%, compounded monthly.
a. What will be the monthly payment if its paid over the 30 years?

b. How much will be paid in total after 30 years? (Or what is the total repayment of the loan?)

c. Find the interest pain on the loan.

2) Zoe invest money in a fund that appreciates in value at a nominal interest rate of 7.1%, compounded
quarterly. I start with $30,000 and make monthly payments of $650 each month.
a. How much will Zoe have at the end of 20 years?

b. How much did Zoe contribute in total to the fund?

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.3 Amortization and Annuity Homework

1. In this question, give all answers to two decimal places.

Bryan decides to purchase a new car with a price of €14 000, but cannot afford the full amount. The car dealership offers
two options to finance a loan.
Finance option A: A 6 year loan at a nominal annual interest rate of 14 % compounded quarterly. No deposit required
and repayments are made each quarter.

a. Find the repayment made each quarter. [3 marks]

b. Find the total amount paid for the car. [2 marks]

c. Find the interest paid on the loan. [2 marks]

Finance option B: A 6 year loan at a nominal annual interest rate of 𝑟 % compounded monthly. Terms of the loan
require a 10 % deposit and monthly repayments of €250.

d. Find the amount to be borrowed for this option. [2 marks]

e. Find the annual interest rate, 𝑟. [3 marks]

f. State which option Bryan should choose. Justify your answer. [2 marks]

g. Bryan’s car depreciates at an annual rate of 25 % per year. Find the value of Bryan’s car six years after it is
purchased. [3 marks]

2. Yejin plans to retire at age 60. She wants to create an annuity fund, which will pay her a monthly allowance of $4000
during her retirement. She wants to save enough money so that the payments last for 30 years. A financial advisor has told
her that she can expect to earn 5% interest on her funds, compounded annually.

a. Calculate the amount Yejin needs to have saved into her annuity fund, in order to meet her retirement goal.
[3 marks]

b. Yejin has just turned 28 years old. She currently has no retirement savings. She wants to save part of her salary
each month into her annuity fund.
Calculate the amount Yejin needs to save each month, to meet her retirement goal. [3 marks]

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number
3. Sophie is planning to buy a house. She needs to take out a mortgage for $120000. She is considering two possible options.

Option 1: Repay the mortgage over 20 years, at an annual interest rate of 5%, compounded annually.

Option 2: Pay $1000 every month, at an annual interest rate of 6%, compounded annually, until the loan is fully repaid.

a. Calculate the monthly repayment using option 1. [2 marks]

b. Calculate the total amount Sophie would pay, using option 1. [2 marks]

c. Calculate the number of months it will take to repay the mortgage using option 2. [3 marks]

d. Calculate the total amount Sophie would pay, using option 2. [2 marks]

e. Give a reason why Sophie might choose option 1. [1 mark]

f. Give a reason why Sophie might choose option 2. [1 mark]

g. Sophie decides to choose option 1. At the end of 10 years, the interest rate is changed to 7%, compounded annually.
Use your answer to part (a)(i) to calculate the amount remaining on her mortgage after the first 10 years. [2 marks]

h. Hence calculate her monthly repayment for the final 10 years. [2 marks]

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.4 Using Amortization To Analyze Home Mortgage Options

Use the amortization schedule calculator at bankrate.com to complete the tables and analyze home mortgage
options for the following loans.
1. Determine the monthly payment for the loan described below. Use the fixed-rate mortgage monthly
payment formula. Assume $0 down. Round your answer to the nearest dollar.
Cost of the house: $200 000 Cost of house: $275 000

Interest Rate: 8% Interest Rate: 3%

15 years 30 years 15 years 30 years

Monthly Monthly
payment payment
(Principal &
(Principal &
Interest Only)
Interest Only)
Total Total
Interest Interest
(after the last
(after the last
payment)
payment)

Total paid Total paid

(total interest (total interest
plus cost of plus cost of
house) house)

a) For either purchase price, do you think the 15 year or 30-year loan is the best option. Explain your
reasoning.

b) Most average Americans take out 30-year mortgages. Why do you think that is?

2. Comparing the two different 30-year mortgage purchase prices/mortgages payments above, describe how
the interest rate has an effect on how much a person is able to buy?

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

3. The Mr. Valadez is hoping to buy a home. He spoke to a Lender and qualifies for $300,000 dollars on a 30-
year fixed rate mortgage assuming the Interest Rate stays as 5.75% with 0 down.
a) What is his monthly payment?

b) Yikes! Mr. Valadez just heard that Interest Rates are going up to 6.125%. Mr. Valadez isn’t really happy
about this. He was comfortable with his monthly payment at the 5.75% and is worried that he won’t be
able to afford a higher monthly payment. He wants to know how much he can get the loan for at the
6.125% Interest Rate, so his monthly payment is the same as it was at the previous interest rate of 5.75%.
What is the new loan amount he should take out if he wants the same monthly payment as before?

4. Use zillow.com, to find a home of your choosing and complete the table below.
Go to TWO separate bank websites and look up current Interest Rates, fill out these Interest Rates in the first row of
the table below.
Purchase Price: ___________________________

Interest Rate Rate A: Rate B:

15 years @ Rate A 30 years @ Rate A 15 years @ Rate B 30 years @ Rate B
Monthly
payment

Total Interest
(after the last
payment)
Total paid
(total interest
plus cost of
house)

5. Google: “8 Costs to Consider Before Buying a Home” What are some of the extra costs associated with buying a
house?

6. We did not consider giving a down payment. Some lenders require a certain percentage (of the cost of the
home) for a down payment. On #4 (the house you picked), how much would be the down payment if you are
required to give down 10% of the cost of the house?

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.4 Finance Review

1.

2.

3.

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number
4.

5.

6.

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.5 Arithmetic Sequences & Series

Arithmetic Sequences:

Formulas

Common Difference:

Examples EXAM HINT

If you use a GDC on your
1) Find the common difference and the next two terms: exam, you will be
a) 13, 7, 1, -5, ….. expected to identify the
first term and common
difference!

2) Find the indicated term of the sequences:

a) 9, 4, -1, …. 𝑢!" b) 3, 9, 15, 21, … 𝑢21

3) If 𝑢1 of an arithmetic sequences is 4 and 𝑢5 is 16, what is 𝑢20 ?

4) Find the missing terms of the arithmetic sequence: 2, 𝑢# , 𝑢$ , 𝑢% , −22

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

Arithmetic Series:

Sn = u1 + u2 + u3 + . . . + un

Sn = (Sigma Notation)

Arithmetic Series Formula

Examples

1) If 𝑎! = 40 and 𝑑 = −3, what is the sum of the first 10 terms?

2) Write the following in sigma notation 4 + 10 + 16 + … + 124, then find the sum.

3) Expand and find the sum of the following: ∑%&'!(3𝑟 + 5)

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.5 Arithmetic Sequences & Series Homework

1. In an arithmetic sequence, u1 = −5 and d = 3. Find u8. [2 marks]

2. The first three terms of an arithmetic sequence are 𝑢! = 0.3, 𝑢" = 1.5, 𝑢# = 2.7.
a) Find the common difference. [2 marks]

b) Find the 30th term of the sequence. [2 marks]

c) Find the sum of the first 30 terms. [2 marks]

3. The Osaka Tigers basketball team play in a multilevel stadium. The most expensive tickets are in the first row. The ticket price, in
Yen (¥), for each row forms an arithmetic sequence. Prices for the first three rows are shown in the following table.
a) Write down the value of the common difference, 𝑑[1 𝑚𝑎𝑟𝑘]

b) Calculate the price of a ticket in the 16th row. [2 marks]

c) Find the total cost of buying 2 tickets in each of the first 16 rows. [3 marks]

4. The first four terms of an arithmetic sequence are 2, 𝑎 − 𝑏, 2𝑎 + 𝑏 + 7, 𝑎𝑛𝑑 𝑎 − 3𝑏, where a and b are constants.
Find a and b.

5. The 8th term of an arithmetic sequence is 74 and the 15th term is 137. Which term has the value 227? [4 marks]

6. An arithmetic sequence has 5 and 13 as its first and second term, respectively.
a) Write down, in terms of n, an expression for the nth term 𝑎$ .

b) Find the number of terms of the sequence which are less that 400.

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number
7. A large underground tank is constructed at Mills Airport to store fuel. The tank is in the shape of an isosceles trapezoidal prism,
ABCDEFGH. AB = 70 m , AF = 200 m, AD = 40 m, BC = 40 m and CD = 110 m. Angle ADC = 60 and angle BCD = 60. The
tank is illustrated below.

a) Find ℎ, the height of the tank. [2 marks]

%&&
Hint: Remember sinθ = '(&

b) Show that the volume of the tank is 624 000 m# , correct to three significant figures. [3 marks]

c) Once construction was complete, a fuel pump was used to pump fuel into the empty tank. The amount of fuel pumped into the
tank by this pump each hour decreases as an arithmetic sequence with terms 𝑢! , 𝑢" , 𝑢# , … , 𝑢$ . Part of this sequence is shown
in the table.

Write down the common difference, 𝑑. [1 mark]

d) Find the amount of fuel pumped into the tank in the 13th hour. [2 marks]

e) Find the value of 𝑛 such that 𝑢$ = 0. [2 marks]

f) Write down the number of hours that the pump was pumping fuel into the tank. [1 mark]

g) At the end of the 2nd hour, the total volume of fuel in the tank was 88 200 m# . Find the total amount of fuel pumped into the
tank in the first 8 hours. [2 marks]

h) Show that the tank will never be completely filled using this pump. [3 marks]

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.6 Geometric Sequences & Series

Geometric Sequence:

Formulas

Common Ratio:

Examples
1) Find the common ratio and the next two terms of the sequence:
$
a) 15, 3, ( , … b) 8, −4, 2, −1, …

2) Find the indicated term of the given sequence:

! !
a) 36, 18, 9, … , 𝑢) b) #( , ( , 1, … . , 𝑎*

3) In a geometric sequence, u4 = 24 and u7 = 192, find u1 and r.

4) Find the missing terms of the geometric series:

+
a) 2, 𝑢# , 𝑢$ , 𝑢% , 162, … b) … , −18, 𝑢* , 𝑢) , % , …

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

Geometric Series:
Sn = u1 + u2 + u3 + . . . + un

Sn = (Sigma Notation)

Geometric Series Formula

Examples
1) Find the sum of the first 10 terms of the geometric series:
$
a) 15 + 3 + ( + ⋯ + 𝑢!, b) 8 − 4 + 2 − 1 + ⋯ + 𝑎!,

2) Write the following in sigma notation 4 + 8 + 16 + … + 4096, then find the sum.

3) A 3D printer builds a set of 49 Eiffel Tower Replicas in different sizes. The height of the largest tower in this
set is 64 cm. The heights of successive smaller towers are 95% of the preceding larger tower, as shown in
the diagram below.

a. Find the height of the smallest tower in this set.

b. Find the total height if all 49 towers were placed one on top of another.

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IB Math SL: Applications and Interpretations Unit 4: Algebra & Number

4.6 Geometric Sequences & Series Homework

1. Consider the geometric sequence 𝑢! = 18, 𝑢" = 9, 𝑢# = 4.5, …. Write down the common ratio of the sequence. [1 mark]

)
2. A geometric sequence has a first term of # and a fourth term of 9.
a) Write down the second term of this sequence. [1 mark]

b) Find the common ratio. [2 marks]

c) The sum of the first 𝑘 terms is greater than 2500. Find the smallest possible value of 𝑘. [3 marks]

3. The first three terms of a geometric sequence are 𝑎, 𝑎 + 14, 9𝑎. Find the value of a. [6 marks]

*+
4. The difference between the fourth and the third term of a geometric sequence is times the first term. Find the common
)
ratio given that 𝑟 > 0.

5.

a) Expand ∑*,-. 2, as the sum of four terms.

b) Find the value of ∑#/

,-. 2
,

6. The first three terms of a geometric sequence are ln𝑥!0 , ln𝑥 ) , ln𝑥 . , for 𝑥 > 0. Find the common ratio. [3 marks]

.1
7. The first term of a geometric sequence is 4, 𝑟 =
+/

a) Find the sum of the first 8 terms.

b) Find the least value of n for which 𝑆$ > 163.

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