Exponential Growth/Decay & Compound Interest

Front

What is Exponential Growth?

Back

Exponential growth occurs when the increase in a quantity is proportional to its current value, leading to growth at an increasing rate over time.

Front

What is Exponential Decay?

Back

Exponential decay describes the process of reducing an amount by a consistent percentage rate over a period of time.

Front

What is Compound Interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

What does the variable 'A' represent in the formula P=A(1+r)^t?

Back

In the formula, 'A' represents the final amount after interest has been applied.

Front

What does the variable 'r' represent in the formula P=A(1+r)^t?

Back

In the formula, 'r' represents the interest rate per time period.

Front

What does the variable 't' represent in the formula P=A(1+r)^t?

Back

In the formula, 't' represents the number of time periods the money is invested or borrowed.

Front

How do you calculate the population after a certain number of years with exponential decay?

Back

Use the formula P = P0 * (1 - r)^t, where P0 is the initial population, r is the decay rate, and t is the time in years.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any accumulated interest.

Front

If a population decreases by 6% per year, what is the decay factor?

Back

The decay factor is 1 - 0.06 = 0.94.

Front

What is the formula for calculating compound interest?

Back

The formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.