# Exponential Functions And Compound Interest Flashcards

Notice how the value of the account increases as the compounding frequency increases. a is the initial or starting value of the function. the graph of f will never touch the x-axis adjusting entries because base two raised to any exponent never has the result of zero. A taylor series is a tool in mathematics to define a function in terms of an infinite power series.

• One way is if we are given an exponential function.
• Compound interest is the concept of earning interest on your investment, then earning interest on your investment plus the interest.
• Over time this results in the exponential growth of your money.
• Both types of functions have numerous real-world applications when it comes to modeling and interpreting data.

Better Explained helps 450k monthly readers with clear, insightful math lessons. The same “30 changes of 1%” happen in each case. The faster your rate (30%) the less time you need to grow for the same effect . The slower your rate (3%) the longer you need to grow . Because https://simple-accounting.org/ of the magic of exponents, we can avoid having two powers and just multiply rate and time together in a single exponent. Our formula assumes growth happens in discrete steps. Our bacteria are waiting, waiting, and then boom, they double at the very last minute. 