Compound Interest (Growth)
A = P(1 + r/100)ⁿ
Where A = final amount, P = principal, r = annual rate (%), n = number of years.
Example: £1000 invested at 5% per year for 10 years.
A = 1000 × (1.05)¹⁰ = 1000 × 1.629 ≈ £1629
Depreciation (Decay)
V = P(1 − r/100)ⁿ
Where V = final value, P = initial value, r = % decrease per period.
Example: Car worth £12,000 depreciates 15% per year. Value after 5 years:
V = 12000 × (0.85)⁵ = 12000 × 0.444 ≈ £5325
This deep dive covers Exponential Growth and Decay in Real Life within Exponential Graphs for GCSE Mathematics. Revise Exponential Graphs in Graphs for GCSE Mathematics with 11 exam-style questions and 10 flashcards. This topic appears regularly enough that it should still be part of a steady revision cycle. It is section 5 of 10 in this topic. Use this deep dive to connect the idea to the wider topic before moving on to questions and flashcards.
Practice questions for Exponential Graphs
The graph of y = 3ˣ always passes through which point?
Explain why the graph of y = 3ˣ has a horizontal asymptote at y = 0, and state the domain of values that y can take.