Algebra Review of Exponential Growth and Decay
**In addition to this class activity, please review linear vs. exponential
functions.**
1. Movie tickets now average $9.75 a ticket, but are increasing 15%
per year. How much will they cost 5 years from now?
y  9.75(1.15)5
y  $19.61
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2. A powerful computer is purchased for $2,000 and on average loses
20% of its value each year. How much will it be worth 4 years from
now?
y  2000(0.80) 4
y  $819.20
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3. Dinner at your grandfather’s favorite restaurant now costs $25.25
and has been increasing steadily at 4% per year. How much did it cost
35 years ago?
y  25.25(1.04) 35
y  $6.40
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4. The number of bacteria present in a colony is 180 at 12 noon and the
bacteria grows at a rate of 22% every two hours. How many will be
present at 8 pm?
y  180(1.22) 4
y  399 bacteria

5. Bank A is offering a 2.7%, compounded annually, saving account
guaranteed for three years. Bank B is offering a 1.9%, compounded
monthly, savings account guaranteed for three years. Which bank
would yield the most on a principal of $500? What is the dollar
amount difference between the two bank accounts?
Bank A:
y  500(1.027)
y  $541.60
3
 0.019 36
y  5001

Bank B:

12 
y  $529.30
Bank A will yield $12.30 more than Bank B.


6. If a gallon of milk costs $3 now and the price is increasing 10% per
year, how long would it take for the milk to cost $10? Round the
answer to the nearest tenth of a year.
10  3(1.1) x Graph and find the intersection point.
It will take approximately 12.6 years.

7. The cost of a High Definition television now averages $1200, but
the cost is decreasing about 15% per year. In how many years will the
cost be around $500? Round the answer to the nearest tenth of a year.
500  1200(0.8) x Graph and find the intersection point.
It will take approximately 5.4 years.

8. Inflation is at a rate of 7% per year. Today, Ms. Na’s favorite bread
costs $3.79. What was the price 10 years ago?
y  3.79(1.07)10
y  $1.93