How can you tell if an exponential model describes growth or decay? Give examples. Solution An exponential model is A = Pekt where P is the initial quantity/amount, A is the quantity after time t and r is the constant of growth/decay. If k is positive, the model depicts growth and if k is negative, the model represents decay. In a case of continuous compounding of interest, k will be positive and will denote rate of interest. Here k > 0 and the example is of exponential growth. Similarly, in a case of bacterial growth, k will be positive and the model will represent exponential growth. However, in the case of a radioactive substance, where the matter decays over time, k wiill be negative and the model is of decay..