Question

During the worst periods of hyperinflation in a certain country. The price of food increased at a rate of 15% per month. State wether this is Linear or exponential

Answer 1

exponential

Explanation:

Since it is increasing per month at a percentage rate then this is an exponential increase. That is because each time the increase occurs it is adding the percentage on top of the previous month's increase which becomes compounded as the months go on. For example, the price of bread is $10, at the end of the first month the price increases by 15% (1.15 in decimal form since it is increasing)

10 * 1.15 = $11.5

Now it costs $11.50. This is a change of $1.50. The next month it increases by another 15%

11.50 * 1.15 = $13.22

Now it costs $13.22 which is an increase of $1.72. The increase in dollar amount will keep rising every time which makes it an exponential rise.