Understanding Exponential Functions in Finance

Which of the following equations represents exponential growth in finance?

Which of the following is the correct formula for compound interest when compounded quarterly?

Which of the following graphs represents an exponential function?

• A straight line

• A parabola

• A curve that increases rapidly

• A horizontal line

If an investment doubles every 5 years, what is the approximate annual growth rate?

Which of the following is a characteristic of exponential growth?

• Linear increase

• Constant rate of change

• Doubling over regular intervals

• Decreasing rate of change

Which of the following best describes the graph of an exponential decay function?

• A curve that decreases rapidly

• A straight line

• A curve that increases rapidly

• A horizontal line