Growth%20Factor

1
Growth Factor

• The base number in an exponential relationship.
• The constant factor that each value is multiplied
  by to get the next value.
• Example
• A 25(3x)
• The growth factor is 3

2
How to find the Growth Factor from a table

• Divide a y-value by the previous y-value.
• Example

X y
1 100
2 300
3 900
300 divided by 100 3 900 divided by 300 3 The
growth factor is 3
3
Growth Rate

• The percent increase in an exponential
  relationship.
• Example The number of rabbits increased from
  100 to 180, an 80 increase.
• The growth rate is 80
• Written as a decimal, this is .80
• Interest is a growth rate

4
How do I find growth rate if I know the growth
factor?

• Subtract 1 from the growth factor to get the
  growth rate.
• Example If the growth factor is 1.2, the growth
  rate is 1.2 1 .2 or 20.

5
How do I find the growth factor if I know the
growth rate?

• Add 1 to the growth rate.
• Example If the growth rate is 70 (.70) add a 1
  to the front of that.
• The growth factor is 1.7.

6
What do I do with a growth factor or growth rate?

• If you have an initial value (y-intercept),
  knowing the growth factor or growth rate will
  help you find subsequent values.
• Example I have 500 in the bank. If I earn 5
  interest for 5 years (compound growth), how much
  will I have at the end of 5 years?

7
Example
Initial value at beginning of year Growth rate value (5) Value with growth factor (1.05)
500 25 525
525 26.25 551.25
551.25 27.56 578.81
578.81 28.94 607.75
607.75 30.39 638.14
8
Practice

• What is the growth factor for a yearly increase
  of 7?
• 1.07
• What is the growth factor for a yearly increase
  of 40?
• 1.4

9
Practice

• What is the growth rate associated with the
  growth factor of 1.3?
• 30
• What is the growth rate of an investment with a
  growth factor of 1.08?
• 8