Determining Percentage Rate of Change

This lesson covers the concept of percent rate of change through exponential models. It begins with a review of compound interest, explaining how to calculate future values using the formula A(t) = P(1 + r)^t. The lesson then contrasts linear functions, which have a constant rate of change, with exponential growth, where the rate increases. A practical example of a company's profit growth is analyzed to determine if it's exponential. Finally, the lesson explores depreciation, showing how it can be modeled exponentially, with a focus on predicting future values. The lesson concludes by reinforcing the understanding of exponential models in financial contexts.

How can you determine if a company's profit growth is linear or exponential?

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What is the significance of the interest rate in predicting future growth?

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Describe how depreciation can be analyzed similarly to exponential growth.

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