Question

The price of a stock on day t is given by the function P(t) where P is in dollars.
Interpret the equation P'(321) = -2. Include units in your answer. If P(321) =68.25, give an estimate for P(320).
(Can someone walk me through this problem so i understand it?)

Answer 1

use calculus in approach

Answer 2

what does that mean?

Answer 3

P(t) is the price function

Answer 4

P'(t) is the derivative of that price function

Answer 5

What do derivatives represent visually?

Answer 6

the slope

Answer 7

slope = (change in y)/(change in x)

Answer 8

in this particular case,

slope = (change in P(t)) / (change in t)

Answer 9

So the units are

change in dollars over change in time

Answer 10

so the units for P'(t) are dollars per day