Question

Given the following exponential function, identify whether the change represents growth or decay, and determine the percentage rate of increase or decrease.

y=21(1.08)^x

Answer 1

It represents growth, and the percentage rate of increase is of 8%

Explanation:

Exponential equation:

An exponential equation has the following format:

`A(t) = A(0)(1 + r)^t`

In which A(0) is the initial amount and r is the rate of change, as a decimal. If positive, it is growth, if negative, it is decay.

In this question:

`y = 21(1.08)^x`

So

`1 + r = 1.08`

`r = 0.08`

Since r is positive, it represents growth, and the percentage rate of increase is of 0.08*100% = 8%