The decay factor for the annual rate of change of - 55 % is 0.45.
A quantity must vary by a specific percentage each time period in order for growth or decay to be exponential.
With the function displayed to the right, you may represent exponential growth or decay.
A(x) = a( 1 + r)ˣ
Where A is the amount after x time periods, a is the initial amount, x is the number of time periods, and r is the rate of change.
Now, we have the annual rate of change as:
r = - 55 % = - 55 / 100 = - 0.55
From the function A(x) = a( 1 + r)ˣ , the corresponding factor is 1 + r.
So, let B = 1 + r
B = 1 + r
B = 1 + (- 0.55)
B = 1 - 0.55
B = 0.45
Now, the value of B is less than 1 therefore, the corresponding decay factor is 0.45.
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