Linear vs Exponential Growth: Complete Guide with Formulas and 8 Worked Examples

Master SAT linear and exponential growth problems with this comprehensive guide. Learn to distinguish patterns, apply formulas, handle compound interest, and solve decay problems with 8 fully worked examples.

SAT Math – Problem Solving & Data Analysis

Linear and Exponential Growth

Comparing constant change versus multiplicative growth patterns

Linear and exponential growth represent two fundamentally different patterns of change. On the SAT, you'll distinguish between them, model real-world situations with appropriate equations, and predict future values—skills that apply everywhere from population dynamics and compound interest to viral spread and technology adoption.

Success requires recognizing which type of growth fits a situation, understanding the structure of linear versus exponential equations, calculating growth over time, and comparing rates of change. These aren't just mathematical abstractions—they're the models that explain why epidemics spread exponentially, why savings grow through compound interest, and why some changes accelerate while others proceed steadily.

Understanding the Two Growth Types

Linear Growth

Linear growth increases (or decreases) by the same absolute amount each time period. The change is constant.

Pattern: Add/subtract the same number repeatedly
Equation: \(y = mx + b\) or \(y = a + bx\)
Example: Saving $50 per month: 50, 100, 150, 200...
Rate: Constant amount per time period

Exponential Growth

Exponential growth increases (or decreases) by the same percentage each time period. The change accelerates.

Pattern: Multiply by the same factor repeatedly
Equation: \(y = a \cdot b^x\) or \(y = a(1 + r)^x\)
Example: Growing by 10% each month: 100, 110, 121, 133.1...
Rate: Constant percentage per time period

Key Difference

The crucial distinction: linear adds, exponential multiplies.

Linear: Same absolute increase each period
Exponential: Same proportional increase each period
Over time: Exponential eventually grows much faster than linear
Recognition: Check if successive differences are constant (linear) or successive ratios are constant (exponential)

Essential Formulas & Concepts

Linear Growth Formula

\(y = a + bx\)

a: Initial value (starting amount)

b: Rate of change (amount added per period)

x: Number of time periods

Exponential Growth Formula

\(y = a \cdot b^x\)   or   \(y = a(1 + r)^x\)

a: Initial value (starting amount)

b: Growth factor (what you multiply by each period)

r: Growth rate as a decimal (b = 1 + r)

x: Number of time periods

Growth vs. Decay

Exponential Growth: \(b > 1\) or \(r > 0\)

Example: 5% growth → \(b = 1.05\)

Exponential Decay: \(0 < b < 1\) or \(-1 < r < 0\)

Example: 20% decay → \(b = 0.80\) or \(r = -0.20\)

Identifying the Pattern

For Linear: Check if differences between consecutive terms are constant

Example: 5, 8, 11, 14 → differences are 3, 3, 3 (linear)

For Exponential: Check if ratios between consecutive terms are constant

Example: 5, 10, 20, 40 → ratios are 2, 2, 2 (exponential)

Common Pitfalls & Expert Tips

❌ Confusing growth rate with growth factor

10% growth rate means multiply by 1.10, not 0.10! Growth factor = 1 + (rate as decimal). Don't forget to add 1!

❌ Using wrong formula for the pattern

If a situation describes "increases by $500 each year," that's linear. If it says "increases by 5% each year," that's exponential. Keywords matter!

❌ Forgetting the exponent in exponential formulas

Exponential growth is \(a \cdot b^x\), not \(a \cdot bx\). The exponent makes all the difference!

❌ Mishandling decay problems

For 15% decrease, use 0.85 (not 0.15). You keep 85% of the previous amount: 1 - 0.15 = 0.85.

✓ Expert Tip: Look for key phrases

"Increases by [number]" = linear. "Increases by [percent]" or "multiplies by" = exponential. Train yourself to recognize these instantly.

✓ Expert Tip: Check the pattern visually

Linear graphs are straight lines. Exponential graphs curve upward (growth) or downward (decay). If you see a curve, think exponential!

✓ Expert Tip: Time zero matters

The initial value 'a' is the amount at time x = 0. Make sure you're counting time periods correctly from the starting point.

Fully Worked SAT-Style Examples

Example 1: Identifying Linear Growth

A savings account starts with $200 and increases by $50 every month. What is the account balance after 8 months?

Solution:

Step 1: Identify the growth type

"Increases by $50 every month" = same absolute amount

This is LINEAR growth

Step 2: Set up linear equation

\(y = a + bx\)

\(a = 200\) (initial amount)

\(b = 50\) (amount added per month)

\(x = 8\) (number of months)

Step 3: Calculate

\(y = 200 + 50(8)\)

\(y = 200 + 400 = 600\)

Answer: $600

Example 2: Exponential Growth with Percentage

A population of bacteria starts at 500 and increases by 20% each hour. How many bacteria are there after 3 hours?

Solution:

Step 1: Identify the growth type

"Increases by 20%" = same percentage each time

This is EXPONENTIAL growth

Step 2: Determine growth factor

20% increase means multiply by 1.20

Growth factor \(b = 1 + 0.20 = 1.20\)

Step 3: Set up exponential equation

\(y = a \cdot b^x = 500 \cdot (1.20)^3\)

Step 4: Calculate

\((1.20)^3 = 1.20 \times 1.20 \times 1.20 = 1.728\)

\(y = 500 \times 1.728 = 864\)

Answer: 864 bacteria

Example 3: Comparing Linear and Exponential

Investment A starts at $1,000 and grows by $100 per year (linear). Investment B starts at $1,000 and grows by 8% per year (exponential). Which has a higher value after 5 years?

Solution:

Calculate Investment A (Linear):

\(y = 1000 + 100(5) = 1000 + 500 = 1500\)

Calculate Investment B (Exponential):

Growth factor = \(1 + 0.08 = 1.08\)

\(y = 1000 \cdot (1.08)^5\)

\((1.08)^5 \approx 1.469\)

\(y = 1000 \times 1.469 = 1469\)

Compare:

Investment A: $1,500

Investment B: $1,469

Investment A is higher after 5 years

Important Note:

In early years, linear can outpace exponential

But exponential eventually surpasses linear over longer time periods

Answer: Investment A ($1,500 vs $1,469)

Example 4: Exponential Decay

A car purchased for $24,000 depreciates by 15% each year. What is its value after 4 years?

Solution:

Step 1: Identify decay factor

15% decrease means you keep 85% of the value

Decay factor = \(1 - 0.15 = 0.85\)

Step 2: Set up exponential decay equation

\(y = 24{,}000 \cdot (0.85)^4\)

Step 3: Calculate

\((0.85)^4 \approx 0.522\)

\(y = 24{,}000 \times 0.522 = 12{,}528\)

Common Error:

Don't use 0.15 as the factor!

15% decrease means multiply by 0.85, not 0.15

Answer: $12,528

Example 5: Identifying Pattern from Data

A sequence of values is: 8, 12, 16, 20, 24. Is this linear or exponential growth? Write the equation.

Solution:

Step 1: Check differences (for linear)

12 - 8 = 4

16 - 12 = 4

20 - 16 = 4

24 - 20 = 4

Constant difference of 4 → LINEAR growth

Step 2: Write linear equation

Starting value (when \(x = 0\)): 8

Rate of change: 4 per period

\(y = 8 + 4x\)

Verification:

\(x = 0\): \(y = 8 + 4(0) = 8\) ✓

\(x = 1\): \(y = 8 + 4(1) = 12\) ✓

\(x = 2\): \(y = 8 + 4(2) = 16\) ✓

Answer: Linear growth; \(y = 8 + 4x\)

Example 6: Identifying Exponential Pattern from Data

A sequence of values is: 3, 6, 12, 24, 48. Is this linear or exponential growth? Write the equation.

Solution:

Step 1: Check differences (for linear)

6 - 3 = 3

12 - 6 = 6

24 - 12 = 12

Differences are NOT constant → Not linear

Step 2: Check ratios (for exponential)

\(\frac{6}{3} = 2\)

\(\frac{12}{6} = 2\)

\(\frac{24}{12} = 2\)

\(\frac{48}{24} = 2\)

Constant ratio of 2 → EXPONENTIAL growth

Step 3: Write exponential equation

Starting value (when \(x = 0\)): 3

Growth factor: 2

\(y = 3 \cdot 2^x\)

Answer: Exponential growth; \(y = 3 \cdot 2^x\)

Example 7: Word Problem with Compound Interest

Maria invests $5,000 in an account that earns 6% interest compounded annually. How much will she have after 10 years?

Solution:

Step 1: Recognize compound interest as exponential

6% interest per year = exponential growth

Growth factor = \(1 + 0.06 = 1.06\)

Step 2: Set up equation

\(y = 5{,}000 \cdot (1.06)^{10}\)

Step 3: Calculate

\((1.06)^{10} \approx 1.791\)

\(y = 5{,}000 \times 1.791 = 8{,}955\)

Note on Compound Interest:

Compound interest is always exponential growth

Each year, you earn interest on the previous year's total

This creates a multiplicative (exponential) pattern

Answer: $8,955

Example 8: Finding Time Period

A population follows the exponential model \(P = 10{,}000 \cdot (1.15)^t\), where t is time in years. What is the population after 5 years?

Solution:

Step 1: Understand the given equation

Initial population: 10,000

Growth factor: 1.15 (15% growth per year)

Variable: t = years

Step 2: Substitute t = 5

\(P = 10{,}000 \cdot (1.15)^5\)

Step 3: Calculate

\((1.15)^5 \approx 2.011\)

\(P = 10{,}000 \times 2.011 = 20{,}110\)

Answer: 20,110 people

Quick Reference Comparison

Feature Linear Growth Exponential Growth
Formula \(y = a + bx\) \(y = a \cdot b^x\)
Pattern Add constant amount Multiply by constant factor
Key Phrases "Increases by [number]" "Increases by [percent]"
Graph Shape Straight line Curve (upward or downward)
Test: Differences Constant Not constant
Test: Ratios Not constant Constant

SAT Growth Problem Checklist

Identifying Growth Type

  • Same amount added? → Linear
  • Same percent increase? → Exponential
  • Check differences (linear)
  • Check ratios (exponential)

For Linear Problems

  • Use \(y = a + bx\)
  • Identify starting value (a)
  • Find rate of change (b)
  • Count time periods (x)

For Exponential Problems

  • Use \(y = a \cdot b^x\)
  • Growth: \(b = 1 + r\)
  • Decay: \(b = 1 - r\)
  • Don't forget the exponent!

Common Mistakes

  • Confusing rate with factor
  • Using wrong formula type
  • Forgetting exponent notation
  • Decay: use (1 - r), not r

Linear and Exponential Growth: The Mathematics of Change

Understanding the difference between linear and exponential growth is fundamental to making sense of the modern world. Linear growth describes steady, predictable change—salaries that increase by fixed amounts, distances covered at constant speed, savings that grow by regular deposits. Exponential growth describes accelerating change—populations that double, investments that compound, viral content that spreads, epidemics that surge. The SAT tests these concepts because they represent essential quantitative reasoning: recognizing which pattern fits a situation, predicting future values, and understanding that exponential processes eventually dominate linear ones. This knowledge applies everywhere—from evaluating investment options and understanding pandemic spread to recognizing unsustainable growth patterns and interpreting scientific data. Master both models not just for test success, but to become someone who can think critically about growth, change, and the mathematics underlying systems all around you. When policymakers discuss population growth, when scientists model climate change, when businesses project revenues, they're applying these same fundamental concepts of linear versus exponential change.