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### Exponential Growth & Compound Interest

```
Date: 6/2/96 at 14:47:9
From: Anonymous
Subject: Exponential Growth & Compound Interest

(1) The cost of goods and services in an urban area increased 1.5%
last month.  If the rate continues, what will be the annual rate of
increase?

(2) Suppose a certain population increases by 30% every 10 years.  By
what percent does it increase each year?
```

```
Date: 6/2/96 at 16:39:41
From: Doctor Anthony
Subject: Re: Exponential Growth & Compound Interest

(1) A = P(1.015)^12 = 1.1956P

This corresponds to 19.56% increase in 1 year.

(2) A = P(1.30)^(0.1) = 1.0266P

This corresponds to 2.66% increase in 1 year.

-Doctor Anthony,  The Math Forum
Check out our web site!  http://mathforum.org/dr.math/
```
Associated Topics:
High School Calculus
High School Interest

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