When Luis opened a mechanic shop his total revenue in thousands of dollars was 2.1 in his first year. Each following year his rate of growth of the total revenue has been 28%. Some of the revenue data for his shop is shown in the table

Question

Year. 1 2 3 4
Total revenue 2.1 2.688 3.44 4.04
(In thousands
of dollars)
Complete the statement
The scenario is best represented by _____( geometric or exponential function)

Answer 1

The scenario is best represented by an exponential function.

In this case, the total revenue Luis earns each year grows at a constant percentage rate (28% each year), which is characteristic of exponential growth. While geometric sequences can also describe situations involving constant ratios, they are typically used to describe discrete values rather than continuous growth portrayed by an exponential function. Therefore, here, the revenue growth follows an exponential model.