Linear and Exponential growth and decay models

Linear growth occurs at a constant rate, with equal increments added or subtracted over time,
while exponential growth involves a constant multiplier that drives an increase or decrease over
time.

Fig: Growth vs. decay

Exponential Growth and Decay

Exponential growth and decay apply to physical quantities which change in value or form in a
rapid manner. The change can be measured using the concept of exponential growth and
exponential decay, and the new obtained quantity can be obtained from the existing quantity. The
formulas of exponential growth and decay are f(x) = a(1 + r)t, and f(x) = a(1 - r)t respectively.

What Is Exponential Growth and Decay?

Exponential growth and decay apply to quantities which change rapidly. Exponential growth and
decay have been derived from the concept of geometric progression. Quantities that do not
change as constant but change in an exponential manner can be termed as having an exponential
growth or exponential decay.
The simplest representation of exponential growth and decay is the formula abx , where 'a' is the
initial quantity, 'b' is the growth factor which is similar to the common ratio of the geometric
progression, and 'x' in the time steps for multiplying the growth factor. For exponential growth,
the value of b is greater than 1 (b > 1), and for exponential decay, the value of b is lesser than 1
(b < 1). Exponential growth finds applications in studying bacterial growth, population increase,
money growth schemes. Exponential decay refers to a rapid decrease in a quantity over a period
of time. The exponential decay can be used to find food decay, half-life, radioactive decay. The
formulas of exponential growth and decay are as presented below.

Exponential growth uses a factor 'r' which is the rate of growth. Here the r-value lies between 0
and 1 (0 < r < 1). The term (1 + r) can be taken as the growth factor. And 't' is the time steps
which is the number of times the growth factor is to be multiplied. The value of 't' can be a whole
number or a decimal number. For exponential decay, the growth factor is (1 - r), which has a
value lesser than 1.
Formulas of Exponential Growth and Decay
The exponential growth and decay have different interpretations of the formulas which are
interrelated and can be interpreted differently. The below table shows the three different
formulas of exponential growth and decay.

Exponential Growth Exponential Decay

f(x) = abx f(x) = ab-x

f(x) = a(1 + r)t f(x) = a(1 - r)t

P = Po ekt P = Po e-kt

In the above formulas the 'a' or P o is the initial quantity of the substance. Further for exponential
growth b = 1 + r = ek and for exponential decay we have b = 1 - r = e-k .
The exponential growth formula is used to find compound interest, find the doubling time, and
find the population growth.
Exponential growth is given by,
f (x) = a (1 + r)x
Where, f (x) = exponential growth function
a = initial amount
r = growth rate
x = number of time intervals
In exponential growth, the quantity increases, slowly at first, and then very rapidly. The rate of
change increases over time. Hence, the exponential growth graph can be described as

The amount drops gradually, followed by a quick reduction in the speed of change and increases
over time. The exponential decay formula is used to determine the decrease in growth. The
exponential decay formula can take one of three forms:
f (x) = abx
f (x) = a (1 – r)x
P = P0 e-k t
Where,
a (or) P0 = Initial amount
b = decay factor
e = Euler’s constant
r = Rate of decay (for exponential decay)
k = constant of proportionality
x (or) t = time intervals (time can be in years, days, (or) months, whatever you are using should
be consistent throughout the problem).
In exponential decay, the quantity decreases very rapidly at first, and then more slowly. The rate
of change decreases over time. The rate of decay becomes slower as time passes. Hence, the
exponential decay graph is denoted as
How to Calculate Exponential Growth or Decay Rate?
The formula for exponential growth and decay is:
y = a bx
Where a ≠ 0, the base b ≠ 1 and x is any real number
A show the initial integer in this function, like the initial population or the initial dose amount.
The growth or decay factor is represented by the parameter b. If b is greater than one, the
function indicates exponential growth. If the function is 0 < b < 1, it depicts exponential decline.
If a percent of growth or decay is given to you and it is said to calculate the growth/decay factor,
add or subtract the percent, expressed in the decimal form, from 1.
Generally, if r is a decimal representation of the growth or decay factor, then:
b = 1 – r Decay Factor
b = 1 + r Growth Factor
The variable x denotes how many times the growth/decay factor is compounded.

Example 1: What is the amount received from the investment fund after 2 years, if $.100,000
were invested at the compounding rate of 5% per every quarter?
Solution:
The invested principal is a = $100,000, the rate of compounding growth is r = 5% = 0.05 per
quarter.
The time period is 2 years, and there are 4 quarters in a year, and we have t = 8.
Applying the concepts of exponential growth and decay we have the following expressions for
exponential growth.
f(x) = a(1 + r)t
f(x) = 100,000(1 + 0.05)8
f(x) = 1,00,000(1.05)8 = 100,000 × 1.47745544 = 147745.44
Therefore an amount of $1,47, 746 is received after a period of 2 years.
Example 2: The radioactive material of thorium decays at the rate of 8% per minute. What part
of 10 grams of thorium would be remaining after 5 minutes?
Solution:
The given initial quantity of thorium is a = 10grams, the rate of decay per minute is r = 8% =
8/100 = 0.08, and the time steps t = 5.
Here we can apply the concepts of exponential growth and decay, and the exponential decay
formula for the decay of thorium is as follows.
f(x) = a(1 - r)t
f (x) = 10(1 - 0.08)5 = 10(0.92)5 = 6.5908
Therefore a quantity of 6.6 grams of thorium remains after 5 minutes.

Example 3: Carbon-14 has a half-life of 5,730 years. Find the carbon-14, exponential decay
model. Please round your answer to the nearest decimal point.
Solution: Use the formula of exponential decay
P = P0 e– k t
P0 = initial amount of carbon
Half-life of carbon-14 is 5,730 years,
P = P0 / 2 = Half of the initial amount of carbon when t = 5, 730.
P0 / 2 =P0 e– k (5730)
Divide both sides by P0
0.5 = e– k (5730)
Take “ln” on both sides,
ln 0.5 = -5730k
Divide both sides by -5730,
k = ln 0.5 / (-5730) ≈ 1.2097
The exponential decay model of carbon-14 is P = P0 e– 1.2097k
Example 4: Andrew spent $350,000 on a new couch. The sofa’s worth falls exponentially at
a pace of 5% every year. So, how much is the sofa worth after two years? Please round
your answer to the nearest decimal point.
Solution: Initial value of Sofa= $350,000
Rate of decay r = 5% = 0.05
Time t = 2 years
Use the exponential decay formula,
A = P (1 – r)t
A = 350000 x (1 – 0.05)2
A = 315,875
The value of the sofa after 2 years = $315,875
Example 5: Maria paid around $20,000 on a fashionable pocketbook. The worth of the
pocketbook decreases exponentially (depreciates) at a yearly rate of 8%. So, what is the
value of the pocketbook after 5 years? Give your answer to the nearest decimals.
Solution: Initial value P = $20,000.
Rate of decay r = 8% = 0.08.
Time t = 5 years.
Use the exponential decay formula:
A = P (1 – r)t
A = 20000 x (1 – 0.08)5 = 13181.63
The value of the pocketbook after 5 years = $13,181.63.