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Below are two situations that can be described using exponential functions. They represent a small sample of the situations where quantities grow or decay by a constant percentage over equal periods of time. For each situation:

  • What is an appropriate unit of time (such as days, weeks, years)?

  • What is the multiplier?

  • What is the initial value?

  • Write an exponential equation in the form that represents the situation.

  1. The value of a car with an initial purchase price of depreciates by per year.

    If the value of the car decreases by every year, then the car is worth of the cost of it during the previous year.

    Years; ;

  2. An investment of earns annual interest, compounded monthly.

    Use a similar process as in part (a) above.