Topic: Sales decline

Question: How many will they have in stock?

A t-shirt company noticed that sales of blue shirts had declined

exponentially at a rate of 23 % per year. They currently have 300 blue shirts
in stock and they don’t plan to purchase any more. How many blue shirts
will they have in stock in 3 years?

Answer choices:

A 250

B 200

C 150

D 100

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Solution: C

We can use the exponential decay equation

S(t) = S0e −λt

where S(t) is the final amount after time t, S0 is the initial amount, and λ is
the rate of decline.

Remember to make sure that rate of decline and time are in the same units
(if your rate of decline is annual, time should be in years).

S(t) = 300e −0.23(3)

S(t) = 150

The t-shirt store will have 150 blue t-shirts left in 3 years.

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Topic: Sales decline

Question: How long will it take to increase the stock?

The pet store noticed that sales of generic cat food was declining at an
exponential rate of 8 % per year. They currently have 600 bags of generic
cat food in stock. Assuming that they do not add any more bags to their
inventory, how many years will it take for their stock level to get to 100
bags?

Answer choices:

A 22.4 years

B 24.4 years

C 24.2 years

D 42.4 years

178
Solution: A

We can use the exponential decay equation

S(t) = S0e −λt

where S(t) is the final amount after time t, S0 is the initial amount, and λ is
the rate of decline.

Remember to make sure that rate of decline and time are in the same units
(if your rate of decline is annual, time should be in years).

100 = 600e (−0.08)t

100
= e (−0.08)t
600

1
= e (−0.08)t
6

1
ln = ln (e (−0.08)t)
6

1
ln = (−0.08)t
6
1
ln 6
t=
−0.08

t = 22.4

It will take the pet store 22.4 years to reduce their stock of generic cat
food to 100 bags.

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