What exponential decay means

Exponential decay reduces a quantity by the same percentage each step. The model is FV=IV(1r)tFV=IV(1-r)^t.

Because the multiplier repeats, the curve drops quickly at first and then flattens as the quantity gets smaller.

Common examples

  • Radioactive decay and similar scientific models.
  • Depreciation or value loss by a fixed percentage each year.
  • Inventory or population shrinkage under constant proportional loss.