When you graduate from college you get job offers from 2 different companies.

• Job 1 pays you $40,000 the first year and gives you a $6,000 raise each year.
• Job 2 pays you $40,000 the first year and gives you a 10% raise each year.

1. What would the salary be for each job in the 2nd year?

2. If you were only planning to work at this job for 4 years, which offer should you accept?

3. In which job would you earn a salary of $100,000 sooner?

Exponential Functions

General Form: 𝒚 = 𝒂𝒃𝒙

𝒂= 𝒃=

𝒙=
Example 1: The population of Macomb County is growing at 4.5% per year. If there are
currently 1.3 million people in Macomb County, create the model that would give the
population T years from now.

Example 2: You borrow $5000 from a loan shark and he charges you 10% interest per week.
Give the model that would calculate how much you owe the loan shark after T number of
weeks.

Example 3: You buy the new Ford Bronco for $45000. It is known to depreciate at a rate of
18% per year. Find the equation that models the value of the Bronco after T years.

Example 4: You invest $25,000 in an investment that pays you 7% per year. How much
money will the investment be worth in 20 years?
Compound Interest

Option 1: You have $100 in an account that pays 10% interest per year.
Option 2: You have $100 in an account that pays 10% interest per year compounded every 6
months.

What is the difference?

Compounding Formula:

𝒓 𝒏𝒕
𝑨 = 𝑷 (𝟏 + )
𝒏

P= r=

n= t=
Example 5: You invest $500 in an investment that pays you 7% interest compounded
monthly. What is the equation that models this situation? How much will it be worth in 10
years?

Example 6: You invest $100,000 in an investment that pays you 4.5% compounded daily.
How much will you have after 15 years?

Example 7: You win $250,000 in the lottery and have two options for investing it.
• 3.99% interest, compounded quarterly for 10 years
• 3.85% interest, compounded monthly for 10 years.

Which is the better option?

Natural Growth

𝒚 = 𝑷ⅇ𝒓𝒕

P= e=

r= t=

Used when something is growing or decaying at a “Continuous” rate.

Example 8:

The population in the state of North Carolina is growing continuously at a rate of 2.1% each
year. If there are currently 11 million people living there, how many will there be in 10
years?

Example 9:

The number of acres of Amazon Rainforest is decreasing at a continuous rate of 1.25% each
year. If there are currently 2.7 million square miles of rainforest, create a function that
models the amount t years from now and use it to determine the number of square miles 50
years from now.