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Exponential Functions

Exponential Growth Functions

If a quantity increases by the same proportion r

in each unit of time, then the quantity displays

exponential growth and can be modeled by the

equation

- Where
- C initial amount
- r growth rate (percent written as a decimal)
- t time where t ? 0
- (1r) growth factor where 1 r gt 1

C is the initial amount.

t is the time period.

y C (1 r)t

(1 r) is the growth factor, r is the growth

rate.

The percent of increase is 100r.

Example Compound Interest

- You deposit 1500 in an account that pays 2.3

interest compounded yearly, - What was the initial principal (P) invested?
- What is the growth rate (r)? The growth factor?
- Using the equation A P(1r)t, how much money

would you have after 2 years if you didnt

deposit any more money?

- The initial principal (P) is 1500.
- The growth rate (r) is 0.023. The growth factor

is 1.023.

Exponential Decay Functions

If a quantity decreases by the same proportion r

in each unit of time, then the quantity displays

exponential decay and can be modeled by the

equation

- Where
- C initial amount
- r growth rate (percent written as a decimal)
- t time where t ? 0
- (1 - r) decay factor where 1 - r lt 1

A quantity is decreasing exponentially if it

decreases by the same percent in each time period.

C is the initial amount.

t is the time period.

y C (1 r)t

(1 r ) is the decay factor, r is the decay rate.

The percent of decrease is 100r.

Example Exponential Decay

- You buy a new car for 22,500. The car

depreciates at the rate of 7 per year, - What was the initial amount invested?
- What is the decay rate? The decay factor?
- What will the car be worth after the first year?

The second year?

- The initial investment was 22,500.
- The decay rate is 0.07. The decay factor is 0.93.

A population of 20 rabbits is released into a

wildlife region. The population triples each year

for 5 years.

A population of 20 rabbits is released into a

wildlife region. The population triples each

year for 5 years. b. What is the population after

5 years?

Help

SOLUTION

After 5 years, the population is

P C(1 r) t

Exponential growth model

20(1 2) 5

Substitute C, r, and t.

20 3 5

Simplify.

4860

Evaluate.

There will be about 4860 rabbits after 5 years.

GRAPHING EXPONENTIAL GROWTH MODELS

Graph the growth of the rabbit population.

SOLUTION

Make a table of values, plot the points in a

coordinate plane, and draw a smooth curve through

the points.

Here, the large growth factor of 3 corresponds to

a rapid increase

P 20 ( 3 ) t

COMPOUND INTEREST From 1982 through 1997, the

purchasing powerof a dollar decreased by about

3.5 per year. Using 1982 as the base for

comparison, what was the purchasing power of a

dollar in 1997?

Let y represent the purchasing power and let t

0 represent the year 1982. The initial amount is

1. Use an exponential decay model.

SOLUTION

y C (1 r) t

Exponential decay model

(1)(1 0.035) t

Substitute 1 for C, 0.035 for r.

0.965 t

Simplify.

Because 1997 is 15 years after 1982, substitute

15 for t.

y 0.96515

Substitute 15 for t.

?0.59

The purchasing power of a dollar in 1997 compared

to 1982 was 0.59.

GRAPHING EXPONENTIAL DECAY MODELS

Help

Graph the exponential decay model in the previous

example. Use the graph to estimate the value of

a dollar in ten years.

Make a table of values, plot the points in a

coordinate plane, and draw a smooth curve through

the points.

SOLUTION

y 0.965t

Your dollar of today will be worth about 70

cents in ten years.

You Try It

- Make a table of values for the function

- using x-values of 2, -1, 0, 1, and Graph

the function. Does this function represent

exponential growth or exponential decay?

Problem 1

This function represents exponential decay.

You Try It

2) Your business had a profit of 25,000 in

1998. If the profit increased by 12 each year,

what would your expected profit be in the year

2010? Identify C, t, r, and the growth factor.

Write down the equation you would use and solve.

Problem 2

C 25,000 T 12 R 0.12 Growth factor 1.12

You Try It

3) Iodine-131 is a radioactive isotope used in

medicine. Its half-life or decay rate of 50 is

8 days. If a patient is given 25mg of

iodine-131, how much would be left after 32 days

or 4 half-lives. Identify C, t, r, and the decay

factor. Write down the equation you would use

and solve.

Problem 3

C 25 mg T 4 R 0.5 Decay factor 0.5

GRAPHING EXPONENTIAL DECAY MODELS

EXPONENTIAL GROWTH MODEL

EXPONENTIAL DECAY MODEL

y C (1 r)t

y C (1 r)t

An exponential model y a b t represents

exponential growth if b gt 1 and exponential

decay if 0 lt b lt 1.

C is the initial amount.

t is the time period.

0 lt 1 r lt 1

1 r gt 1

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