Algebra II Name___________________________________

Interest, Growth and Decay Class Examples Date_________________________ Period_____

y is the final amount, C is the initial amount,

Growth and Decay y  Cekt k is the constant rate per unit of time, and
t represents time
A is the amount of money in the account including
Continuously Compounded A  Pert interest earned, P is the initial investment,
Interest r is the annual interest rate, and t is the time in
years
A is the amount of money in the account including
nt interest earned, P is the initial investment,
A  P 1  
Compound Interest
r
r is the annual interest rate, n is the number of
 n times the interest is compounded per year and
t is the time in years
nt A is the appreciated value of the item, P is the
A  P 1 
Appreciation r initial value of the item, r is the fixed annual rate of
 appreciation so n = 1 , and t is the time in years
 n
nt A is the depreciated value of the item, P is the
A  P 1  
Depreciation r initial value of the item, r is the negative fixed
annual rate of depreciation so n = 1, and t is the
 n time in years

Class Examples

1. The Krafts invest $3000 at 7.2% interest compounded continuously. Determine how long it will take their
investment to be worth $10,000.

2. Determine how many years it will take a sum of money to double in value when it is invested at 8.2%
interest compounded every 3 months.

3. A $175,000 home increases in value at a constant rate of 6% per year. In how many years will the house
be worth $250,000?

4. A car valued at $35,000 depreciates at a constant rate of 14% per year. In how many years will the car be
worth $15,000?

5. A certain strain of bacteria population decreases from 326 to 40 in 120 minutes. Find the value of k.

How long does it take the bacteria to reach its half life?
Class Examples (Document Camera)

1. The Krafts invest $3000 at 7.2% interest compounded continuously. Determine how long it will
take their investment to be worth $10,000.

2. Determine how many years it will take a sum of money to double in value when it is invested at
8.2% interest compounded every 3 months.

3. A $175,000 home increases in value at a constant rate of 6% per year. In how many years will
the house be worth $250,000?

4. A car valued at $35,000 depreciates at a constant rate of 14% per year. In how many years will
the car be worth $15,000?

5. A certain strain of bacteria population decreases from 326 to 40 in 120 minutes. Find the k value.

How long does it take the bacteria to reach its half life?