We can use exponential functions to help us describe how things in our world
change. Many things increase or decrease at exponential rates, we call these
growth or decay functions.
y = C(1+ r) t
y = the final amount
C = the initial amount
r = rate ( percent as a decimal)
t = time
Example: Computer use has risen 19% annually since 1980.
1. If 18.9 million
€ computers were in use in 1980, write and equation for the
number of computers in use for t years after 1980.
C = 18.9 million
r = 18.9% = .189 This is the information we are given
t=t
This would be the equation used to predict the number of computers in use t
years after 1980.
€
2. Predict the number of computers in use by 2015.
⎛ r ⎞ nt
The formula for compound interest is:
A = P⎜1+ ⎟
⎝ n ⎠
A = Current amount
P = Principal (initial amount)
r = rate (percent as a decimal)
n = number of times interest is compounded in a year
€ t = time in years
€
Example: Determine the amount of an investment if $300 is invested at an
interest rate of 3.5% compounded monthly for 22 years.
y = C(1 − r) t
If you compare this to the exponential growth formula you will see that it is almost
identical except for the subtraction in place of the addition. The variables still
represent the same things.
€
Example: During the past several years, the population of Campbell County,
Kentucky, has been decreasing at an average rate of about 0.3% per year. In
2000, its population was 88,647.
C = 88,647
r = .003 This is the information we are given.
t=t
This would be the equation for predicting the number of people living in Cambell
County t years after 2000.
€
2. If the trend continues, predict the population in 2010.