The general formula for exponential growth and decay is:
[tex]y=a(1\pm r)^x[/tex]where a is the initial value (that is the amount we have at the beginning) and r is the growth or decay rate. In this equation if we have a plus then we have a growth and if we have a minus we have a decay.
Now, in our case we have 1.075 as the base this can be written as:
[tex]1+0.075[/tex]Then we have a plus, therefore the function represent an exponential growth.
