Continuous growth and decay

Continuous growth and decay

We now have a better understanding of how the compounding frequency will affect the amount we wish to grow or decay. But what if we are dealing with something, say, that compounds every minute, second, or even millisecond? This concept is also known as continuous compounding. In this section, we will see a slight variation of an exponential growth and decay formula that models continuous exponential growth/decay.


Continuous Growth/Decay: Af=Aiert { A_f = A_i e^{rt}}

Af {A_f} : final amount

Ai {A_i} : initial amount

e {e }
: constant = 2.718…

r {r }
: rate of growth/decay
• growth rate of 7% r=7100=0.07 \to {r = {7\over100} = 0.07}
• growth rate of 15%r=15100=0.15 \to {r = - {15\over100} = - 0.15}

t {t }
: total time given
Teacher pug

Continuous growth and decay

Don't just watch, practice makes perfect.

We have over 820 practice questions in Precalculus for you to master.