Exponential Growth & Decay Lesson 8.7

Growth: goes up in value, use this formula! y = c(1+r) t 1+r>1 Decay: goes down in value, use this formula! y = c(1- r) t 1- r <1

Example: You buy a new 10 speed bike for $150. It loses value at a rate of 15% per year. What is it’s worth in 3 years? Worth = cost(rate) years w = c(1-0.15) 3 (a loss means –15%) w = 150(.85) 3 w = The bike was only worth $92.12 in 3 years.

Identify the following as growth or decay  y = 500(1.20) 5  y = 375(.078) t  y = 5(1.078) 6  y = 30(.99) 4

Write a general equation for the following  You purchased a car for $35,000. The minute you drove it off the lot it started going down in value by 1.3%. Write an equation for its value in the future.  You just purchased a painting as an investment and it is suppose to appreciate it value at a rate of 3.65% each year. Write an equation for its value in the future. V = 35,000(0.987) t V = P(1.0365) t