Why this chapter matters
Repeated percentage change appears in population, depreciation, spread, and many science applications where a linear model fails.
What you will learn
- Identify constant difference versus constant ratio patterns.
- Write and interpret growth and decay models.
- Use tables, graphs, and residual thinking to evaluate a simple model.
Understand the core ideas
Linear and exponential models can look similar over short intervals, so pattern checks are essential. Linear data have a constant difference between consecutive outputs. Exponential data have a constant ratio or percent multiplier. In is the initial value at x = 0, and b is the growth factor. If b > 1, the quantity grows. If 0 < b < 1, it decays. Distinguishing additive from multiplicative change prevents choosing a model that gives bad long-term predictions.
When fitting data, use context plus residual thinking. If errors from a linear model systematically curve up or down, an exponential model may fit better. Exponential graphs cross the y-axis at a and approach zero in decay cases without reaching it, creating a horizontal asymptote at y = 0 in many practical settings. Interpret model outputs with units and reasonableness checks. A mathematically valid model can still be contextually invalid if it predicts impossible negatives or unrealistic scale.
Key terms
- growth factor
- The multiplicative change per step in an exponential model, commonly 1 + rate.
- decay
- Repeated percentage decrease represented by a factor between 0 and 1.
- initial value
- The model output when x = 0, equal to parameter a in .
- residual
- The difference between an observed data value and a model prediction.
Build an exponential growth model
A culture starts with 500 cells and increases by 12 percent each hour. Write a model and find the count after 4 hours.
- Identify initial value a = 500.
- Convert 12 percent growth to factor b = 1.12.
- Write the model .
- Substitute x = 4: .
- Multiply to get y = 786.75968 and round to about 787 cells.
A common misconception
Claim: If data increase each step, the relationship is automatically linear.
Correction: Increasing values can be linear or exponential. Check whether differences stay constant or ratios stay constant.
Lessons in this chapter
- Linear versus exponential changeCompare additive and multiplicative patterns.
- Growth and decay modelsInterpret initial value and growth factor.
- Reading exponential graphsConnect intercepts and long-run behavior to context.
- Choosing a modelCheck whether data support a linear or exponential relationship. Read the full guide →
Study task
Chapter checkpoint
A quantity starts at 200 and grows by 8% each period. Write its model.
Use , where x is the number of growth periods.