# exponential growth

Exponential Growth

A model for growth of a quantity for which the rate of growth is directly proportional to the amount present. The equation for the model is A = A0bt (where b > 1 ) or A = A0ekt (where k is a positive number representing the rate of growth). In both formulas A0 is the original amount present at time t = 0.

This model is used for such phenomena as inflation or population growth. For example, A = 7000e0.05t is a model for the exponential growth of \$7000 invested at 5% per year compounded continuously.