Question

10. The amount of people using a certain product can be modeled by P = 85(1.2) where t is the

number of years since the product was first released. What is the growth rate?
A) 2%
B) 20%
C) 120%
D) 12%

Answer 1

B) 20%

Explanation:

Exponential equation:

An exponential equation is given by:

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

In which A(0) is the initial amount and r is the growth rate, as a decimal.

In this question:

`P(t) = 85(1.2)^t`

Growth rate:

We want to find r, so:

`1 + r = 1.2`

`r = 1.2 - 1 = 0.2`

The growth rate is of 0.2 = 2%, and the correct answer is given by option B.