How do you determine if the equation #y=400(1.03)^x# represents exponential growth or decay?

1 Answer
Feb 13, 2016

Growth

Explanation:

This is exponential growth. Essentially if the power is positive for #x>0# then it will be exponential growth; if the power is negative for #x>0# then it will be exponential decay.

Here is a graph of the two situations to help you understand them better:

#y=(1.03)^x#
graph{1.03^x [-63.5, 277.4, -48.3, 122.2]}

#y=(1.03)^(-x)#
graph{1.03^(-x) [-160.4, 151.8, -27.7, 128.5]}

Notice that where #x# is positive we a growth and where #x# is negative we have a decay.