Question 22 Which of the following is an example of exponential growth?
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Which of the following is an example of exponential growth?
Select any one of the following options
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Answer: A. A) Compound interest
Compound interest follows the formula A = P(1 + r/n)^(nt), where the principal grows exponentially with time.
Step-by-step Derivation:
Step 1: Exponential growth occurs when the rate of change is proportional to the current quantity, following y(t) = y_0 * e^(kt) or A = P(1 + r)^t.
Step 2: In compound interest, accumulated interest itself earns interest, resulting in geometric/exponential increase.
Step 3: Depreciation is exponential decay, age is linear growth, and constant acceleration velocity is linear.