Another common trend in continuous data patterns is exponential growth, which is also commonly seen as exponential decay. In exponential growth, a future value is proportionally related to the current value. The general formula for this type of growth can be written as:
Where y0 is the quantity's initial value (when x = 0), and r is the growth rate of the quantity.
For instance, if you are investing money in the stock market and expect a 5% rate of return per year (r = 0.05) with an initial investment of $10,000, after five years you can expect $12,763. The exponential growth formula applies here because the amount of money you have next year is proportionally related to the amount of money you have this year, and the amount of money you have two years from now is related to the money you have next year, and so on...