Back to Mathematical Modelling

Higher Applications of Mathematics

Exponential models

Growth, decay and multiplicative change.

Before you start

  • Be confident substituting numbers into simple formulae.
  • Check the units in the question before calculating.
  • Be ready to explain what an answer means in the real situation.

Method helper

Which model or method do I use?

Modelling lesson

Key idea

  • This topic focuses on modelling repeated percentage growth and decay using multipliers. Mathematical modelling is about using maths to represent a real situation well enough to support a decision.
  • A good model identifies the variables, uses a sensible formula or graph, and states the assumptions being made.
  • For Higher Applications, the interpretation matters. You should explain whether the output is realistic, what it means in context, and what might make the model less reliable.

Key formulae, definitions and methods

  • Future value = starting value × factorⁿ, where n is the number of time periods
  • Growth factor = 1 + rate; decay factor = 1 − rate
  • Exponential models use repeated multiplication, not repeated addition.

Worked examples

Modelling walkthrough 1

Build the model

An electric bike is expected to depreciate by the same percentage each year.

  1. Convert the percentage decrease into a decay factor.
  2. Identify the starting value and number of years.
  3. Write the exponential model.

Exponential decay is suitable when the same percentage is applied repeatedly.

Modelling walkthrough 2

Use the model

An electric bike is expected to depreciate by the same percentage each year.

  1. Substitute the values into the model.
  2. Calculate using the power for repeated years.
  3. Round the money value to two decimal places.

The factor controls the direction and size of the change.

Modelling walkthrough 3

Evaluate the model

An electric bike is expected to depreciate by the same percentage each year.

  1. Compare the prediction with a linear decrease model.
  2. Explain why repeated percentage decrease slows down in cash terms.
  3. State one limitation, such as condition or market demand.

A depreciation model is an estimate, not a guaranteed resale value.

Watch out

  • Using a model without defining the variables and units.
  • Choosing a linear model when the rate of change is not constant.
  • Treating a model prediction as an exact fact rather than an estimate.
  • Forgetting to convert units before substituting values.
  • Giving a calculation without commenting on assumptions or limitations.

Technology and data connection

Related Higher Applications topics

Next step

Move into practice

Use the learning notes to identify variables, assumptions and units, then try varied formulas, model types and reasonableness checks.

Modelling mixed quiz