Compound Growth & Decay
Maths: Edexcel A Level Pure Maths, topic 6.2.5
Compound Growth and Decay
Growth and decay
- When an amount increases or decreases by a set percentage on a regular basis this is called compound growth or compound decay.
- The amount that is lost/gained changes with each interval since the amount lost/gained is a percentage of the current amount.
Formula
- This formula gives the amount after n intervals:
- N = S × (multiplier)n
- Where S is the starting amount and the multiplier is the percentage multiplier:
- 1.25 for a 25% increase or 0.6 for a 40% decrease.
Test yourself on Compound Growth & Decay
What's the formula for compound growth and decay?
What do we call it when an amount increases by a set percentage on a regular basis?