Remember that you can only apply this rule to compounding growth or decay. In other words, this formula can only be used for investments that earn compound interest, not simple interest.

Recall that the solution of the initial-value problem \(y^\prime=ky\text{,}\) \(y(0)=A\text{,}\) is given by \(\ds y=Ae^{kx}\text{.}\) Solve the following problems ...