Lesson 4

Word Problems with

Exponential Functions

Concept: Characteristics of a function

EQ: How do we write and solve exponential

functions from real world scenarios?

Vocabulary: Growth Factor, Decay Factor,

Percent of Increase, Percent of Decrease
 Before we begin……
 Imagine that you buy something new that you love (i.e. phone, shoes,
clothes, etc.)

 Later when you no longer want that item, you choose to sell it someone.
• How would you decide to sell that item?

• What price do you think would be a fair price?

• Would you sell that item for the same price as you bought it?

• Do you think that is fair?

 Exponential Function
 A function in the form:

 Base is Constant
 Exponent is the Independent
Variable
 Exponential Growth

 Exponential growth occurs when a quantity increases by the same percent

r in each time period t.

𝒕
 
𝑦=𝑪 (1 +𝒓 ) Growth

rate
Initial Growth
Final Time Period
value factor
value

  𝒙
𝑓 ( 𝑥 )= 𝒂 𝒃
• Remember if b > 1, then you will have growth.
 Exponential Growth Exponential Decay

𝒕
 
𝑦=𝑪 (1 +𝒓 )   𝑦=𝑪 (1 − 𝒓 )𝒕
 Exponential Money Growth

𝒏
 
𝑦= 𝑷 (1+ 𝒓)

 Step 1: Write the formula you’re using.

 Step 2: Substitute the needed quantities into your formula.
 Step 3: Evaluate the formula.
 Step 4: Interpret your answer.
 Compound Interest Formula

Number of Years
Annual Interest Rate

Amount in account
n t
 r
after t years.

A  P 1  
 n Number of times

compounded per

year.
Initial principal

deposited in an

account.
  Annual Percent of Increase or Decrease

 Exponential Growth Exponential Decay

𝒕 𝒕
 
𝑦=𝑪 (1 +𝒓 ) 𝑦=𝑪 (1 − 𝒓 )  

 Step 1: Identify if the function is a growth or a decay.

 Step 2: Write the factor from the corresponding exponential formula and
set it equal to the base. Growth: 1 + r = base Decay: 1 – r = base

 Step 3: Solve the formula for r.

 Step 4: Find the percent of increase or decrease. Use your answer from
step 3 and plug it into 100r.
Find the annual percent of increase or decrease that

f ( x ) = 12 (1.25) 𝒙
  ❑

Step 1: Identify if it’s a growth or a decay.

Since the base (1.25) is greater than 1, it’s a

Step 2:growth.
Look at the growth factor from the exponential

formula: 1 + r and set it equal to the base

1+ r =the
 Find 1.25
annual percent of increase or decrease that f(x) =

2(1.25) models

Step 3: Solve the formula for r 1 + r = 1.25

-1 -1
Step 4: Find the percent of increase. So substitute your
r = .25
value for r into 100r--- 100(.25) = 25

The percent of increase is 25%

  Annual Percent of Decrease

 Example : Find the annual percent of increase or decrease that f(x) = 3(0.80)x models

 Step 1: Identify if it’s a growth or a decay.

 Since the base (0.80) is less than 1, it’s a decay.

 Step 2: Look at the decay factor from the exponential formula: 1 – r and set it equal to
the base
 1 - r = 0.80
 1 - r = 0.80

 Step 3: Solve the formula for r -1 -1

 - r = -.20
 -1 -1
 r = .20

 Step 4: Find the percent of decrease. So substitute your value for r into 100r---
100(.20) = 20

 The percent of decrease is 20%

 For the following, state whether the function is an

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount and the

c) growth or decay rate

t
8
d) growth or decay factor.

g ( x)  10 
5
exponential growth
a) ___________________

10

b) ___________________
growth rate, 60%

growth factor, 8/5

c) ___________________
 For the following, state whether the function is an

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount and the

c) growth or decay rate

d) growth or decay factor.

g ( x)  7 0.7 
t

exponential decay
a) ___________________

b) ___________________
decay rate, 30%

decay factor, 0.7

c) ___________________
 For the following, state whether the function is an

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount and the

c) growth or decay rate

d) growth or decay factor.

g ( x)  20001.05
t

exponential growth
a) ___________________

2000

b) ___________________
growth rate, 5%

growth factor, 1.05

c) ___________________
 The attendance at the Art Museums during the opening was 250

people. The attendance has been increasing at a rate of 3% each

month. How many people will attend by the end of a year?

By the end of a year, 356 people will attend

the Art Museums.

State the

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount

c) growth or decay rate

 A population of 40 pheasants is released in a wildlife

preserve. The population doubles each year for 4 years.

What is the population after 4 years?

After 4 years, the population will be about

640 pheasants.
State the

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount

c) growth or decay rate

 A principal of $600 is deposited in an account that pays

3.5% interest compounded yearly. Find the account balance

after 4 years.

The balance after 4 years will be

about $688.51.
State the

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount

c) growth or decay rate

 You bought a used truck for $15,000. The value of the truck

will decrease each year because of depreciation. The truck

depreciates at the rate of 8% per year. Estimate the value

of your truck in 5 years.

The value of your truck in 5 years

will be about $9,886.22

State the

a) exponential growth model or an exponential decay model. Then

b) identify the initial amount

c) growth or decay rate

If you invested $200.00 in an account that paid
simple interest, find how long you’d need to leave it
in at 4% interest to make $10.00
In 1985, there were 285 cell phone subscribers in the
small town of Centerville.  The number of subscribers
increased by 75% per year after 1985.  How many
cell phone subscribers were in Centerville in 1994?
Bacteria can multiply at an alarming rate when each
bacteria splits into two new cells, thus doubling.  For
example, if we start with only one bacteria which can
double every hour, by the end of one day we will
have over 16 million bacteria
In January, 1993 , there were about 1,313,000 Internet
hosts. During the next 5 years the number of hosts
increased by about 100% per year.
Write a function to model the number h (in
millions) of hosts t years after 1993. About
how many hosts were there in 1996?
2. You buy a new car for $24,000. The value y of the
car decreases by 16% each year.
Write a function to model the value of the car. Use the model to
estimate the value after 2 years.
You deposit $1,000 in an account that pays 8% annual
interest. Find the balance after 1 year if the interest is
compounded with the given frequency.

a. Annually

b. Quarterly

c. Daily
2. You deposit $1,600 in a bank account. Find the
balance after 3 years if the account pays 2.5%
annual interest compounded monthly.

3. What if the account paid 1.75% annual interest

compounded quarterly?