MAT_1143-mar_18 - March 18, 2011 Click to edit Master...

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Click to edit Master subtitle style March 18, 2011 5.5 Growth and Decay Rate (as opposed to factor)
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Rate You will see the term rate used in a couple related meanings. Rate of Change What we used for lines-where it was constant Change in Output/ Change in Input Growth Rate Will talk about now related to exponential growth and decay Change in Output (in one time period)/ Original Output Usually expressed as a percent
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Growth Rate Invest $1000 at 6% interest each year So, 6% is our growth rate Growth Factor = 1 + Growth Rate (what we had + what we get from the growth rate) Growth factor = 1+.06 = 1.06 So our equation is P = Obj102 Don’t see a lot of growth early BUT there is as time progresses Any long-term investment uses this exponential growth strategy/ assumption.
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Another Pattern is Seen in Earlier Examples Our growth factor was 2, as we doubled each time As a percent, how would we describe the growth? A: Up 200% over what it was B: Up 100% over what it was C: Up 2% over what it was D: Up 1% over what it was Our growth rate is 100% 100% = 1.00 in decimal form Growth rate + 1 = Growth factor
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MAT_1143-mar_18 - March 18, 2011 Click to edit Master...

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