3 Vocabulary Terms - Define/Illustrate
Name an exponential situation - involves exponents:
Write a table out if you have $100 and you gain 5% each year for 3 years:
Write a table out if you have $100 and you lose 5% each year for 3 years:
Exponential growth: Exponential growth occurs when a quantity increases at a consistent, fixed percentage rate over a period of time. In mathematical terms, it is represented by the formula y = a(1 + r)^t, where a is the initial amount, r is the growth rate, and t is the time period.
Illustration:
Starting amount = $100
Growth rate = 5%
Time period = 3 years
Year Amount
1 $105
2 $110.25
3 $115.76
Exponential decay: Exponential decay occurs when a quantity decreases at a consistent, fixed percentage rate over a period of time. In mathematical terms, it is represented by the formula y = a(1 - r)^t, where a is the initial amount, r is the decay rate, and t is the time period.
Illustration:
Starting amount = $100
Decay rate = 5%
Time period = 3 years
Year Amount
1 $95
2 $90.25
3 $85.74