Math Problem Statement

A company is producing and selling a product, with the production cost per unit being $10 and the selling price per unit being $15. The company's initial production rate is 100 units per month, and it is increasing by 10% every month. The company's total revenue can be modeled by the differential equation $\frac{dR}{dt} = (15 - 10) \cdot (100 \cdot 1.1^t)$, where R is the total revenue and t is the time in months. Find the total revenue after 6 months, rounded to the nearest dollar.

Solution

The differential equation for the company's revenue is given by:

dRdt=(1510)(1001.1t)\frac{dR}{dt} = (15 - 10) \cdot (100 \cdot 1.1^t)

Since the selling price per unit is $15 and the cost per unit is $10, the profit per unit is $15 - 10 = 5$. Thus, we have:

dRdt=5(1001.1t)=5001.1t\frac{dR}{dt} = 5 \cdot (100 \cdot 1.1^t) = 500 \cdot 1.1^t

To find the total revenue R(t)R(t) after 6 months, we need to integrate this differential equation:

R(t)=5001.1tdtR(t) = \int 500 \cdot 1.1^t \, dt

Step 1: Integrate 5001.1t500 \cdot 1.1^t

The integral of 1.1t1.1^t is calculated as follows: 1.1tdt=1.1tln(1.1)\int 1.1^t \, dt = \frac{1.1^t}{\ln(1.1)}

Therefore, R(t)=5001.1tln(1.1)+CR(t) = 500 \cdot \frac{1.1^t}{\ln(1.1)} + C

Step 2: Solve for the constant CC

Since R(0)=0R(0) = 0 (assuming revenue is zero at t=0t = 0), we substitute t=0t = 0 and R=0R = 0 to find CC:

0=5001.10ln(1.1)+CC=500ln(1.1)0 = 500 \cdot \frac{1.1^0}{\ln(1.1)} + C \Rightarrow C = -\frac{500}{\ln(1.1)}

Thus, the total revenue function becomes: R(t)=5001.1tln(1.1)500ln(1.1)R(t) = 500 \cdot \frac{1.1^t}{\ln(1.1)} - \frac{500}{\ln(1.1)}

Step 3: Calculate R(6)R(6)

Now, substitute t=6t = 6:

R(6)=5001.16ln(1.1)500ln(1.1)R(6) = 500 \cdot \frac{1.1^6}{\ln(1.1)} - \frac{500}{\ln(1.1)}

Numerical Calculation

  1. Calculate 1.161.7715611.1^6 \approx 1.771561
  2. Using ln(1.1)0.09531\ln(1.1) \approx 0.09531:

R(6)5001.7715610.095315000.09531R(6) \approx 500 \cdot \frac{1.771561}{0.09531} - \frac{500}{0.09531} 50018.58650010.493\approx 500 \cdot 18.586 - 500 \cdot 10.493 92935246.5=4046.5\approx 9293 - 5246.5 = 4046.5

Rounding to the nearest dollar, the total revenue after 6 months is approximately:

4047\boxed{4047}

Would you like further details on any step, or have any other questions?


  1. What would happen to the revenue if the production rate increased by 20% instead of 10%?
  2. How does the revenue change if the initial production rate was 200 units?
  3. What if the profit per unit was different, say $7 per unit?
  4. How would we model total costs and profits, not just revenue?
  5. What would be the revenue after 12 months?

Tip: Differential equations can model dynamic changes in business metrics, such as revenue or costs over time.

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Math Problem Analysis

Mathematical Concepts

Calculus
Differential Equations
Exponential Growth

Formulas

Differential equation \( \frac{dR}{dt} = 5 \cdot 100 \cdot 1.1^t \)
Integration of exponential functions: \( \int a^t dt = \frac{a^t}{\ln(a)} \)

Theorems

Fundamental Theorem of Calculus

Suitable Grade Level

Grades 11-12, College Level