Download - Exponential Growth & Decay
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Exponential Growth & Decay
Lesson 8.7
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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
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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.
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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
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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