Two bank accounts...
Since exponential growth is truly a universal model, we’ll start with something that is intuitive for most people – money in your bank account.
Let’s say you have $1000 to deposit, and you have a choice of two savings accounts:
- the first bank offers you $50 each year, every year.
- the second bank offers you 5% interest on your balance at the end of each year.
Use the applet below to see what will happen to each account's balance. Which account would you choose?
To see the true power of exponential growth, keep going until year 30 or so...
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