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Exponential Growth Formula:
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Exponential growth describes a process where the growth rate of a value is proportional to its current value, leading to growth that accelerates over time. This is common in finance, population studies, and biology.
The calculator uses the exponential growth formula:
Where:
Explanation: The formula calculates how an initial amount grows over time at a constant rate, with compounding occurring continuously.
Details: Understanding exponential growth is crucial for financial planning, investment analysis, population projections, and many scientific applications. It helps predict future values based on current growth rates.
Tips: Enter the initial amount in GBP, growth rate as a percentage (can be negative for decay), and time period in years. All values must be valid (initial amount > 0, time > 0).
Q1: What's the difference between exponential and linear growth?
A: Linear growth adds a fixed amount each period, while exponential growth multiplies by a fixed factor, leading to much faster growth over time.
Q2: How is this different from compound interest?
A: Compound interest typically compounds at discrete intervals, while this formula assumes continuous compounding for mathematical simplicity.
Q3: Can this calculator handle negative growth rates?
A: Yes, negative rates will calculate exponential decay (e.g., depreciation or population decline).
Q4: What are typical applications in the UK?
A: Common uses include investment growth projections, inflation calculations, population studies, and business forecasting.
Q5: How accurate are these projections?
A: They assume the growth rate remains constant, which may not reflect real-world variability. Use as a guide rather than absolute prediction.