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Exponential Growth & Decay

Exponential Growth & Decay. Lesson 8.7. Growth: goes up in value, use this formula! y = c(1+r) t 1+r>1 Decay: goes down in value, use this formula! y = c(1- r) t 1- r <1. Example:

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Exponential Growth & Decay

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  1. Exponential Growth & Decay Lesson 8.7

  2. Growth: goes up in value, use this formula! y = c(1+r)t 1+r>1 Decay: goes down in value, use this formula! y = c(1- r)t 1- r <1

  3. Example: You buy a new 10 speed bike for $150. It loses value at a rate of 15% per year. What is it’s worth in 3 years? Worth = cost(rate)years w = c(1-0.15)3 (a loss means –15%) w = 150(.85)3 w = 92.12 The bike was only worth $92.12 in 3 years.

  4. Identify the following as growth or decay • y = 500(1.20)5 • y = 375(.078)t • y = 5(1.078)6 • y = 30(.99)4

  5. Write a general equation for the following • You purchased a car for $35,000. The minute you drove it off the lot it started going down in value by 1.3%. Write an equation for its value in the future. • You just purchased a painting as an investment and it is suppose to appreciate it value at a rate of 3.65% each year. Write an equation for its value in the future. V = 35,000(0.987)t V = P(1.0365)t

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