Exponential Growth/Decy - Working with Decimals?

Question

Lets say you had exp. decay or depreciation of something at 25,000 for either 20% .. at 7 years:

it would be Y = 25,000(.80)^7 correct?

Lets say it was exp growth.

it would be Y = 25,000(1.20)^7 correct?

what about 4.3% (1.043) or 45.6% (1.0456) correct?

Thanks

Answer 1

everything is right, except if it was 45.6%, it would be (1.456). You seem to know what you're doing, so that might have been a typo or something.


decimals work the same way as whole numbers, just divide them by 100 to get the number that you add or subtract from 1.

(1+i)^n is for exp growth at a rate of i, for n years
(1-i)^n is for exp decay at a rate of i, for n years.

i is the percent divided by 100. 45.6/100 = 0.456, 20/100 = 0.20, 4.3/100 = 0.043, etc.

Hope that helps

Answer 2

You need to be more specific with your "rate constant". In the decay case, your value is 20% per year. The growth is 20% per year. Your 45.6% growth rate is 1.456.

Answer 3

absolutely correct! mark yourself as the best answer:))! except 45% wich would be 1.45