Nick will apply for a business loan for his toy company. The loan officer asked Nick to determine the company's current value and growth for the next few years. Nick projected a steady growth rate for his
toy business.

Is Nick's model linear or exponential? How do you
know?

Year Project Value
0 $25,000.00
1 $26,250.00
2 $27,562.50
3 $28,940.63
4 $30,387.66
5 $31,907.04

PLEASE HELP ME ✔️

Dividing the current value by the previous value ALWAYS equals 1.05.

Since the growth rate is constant, it is linear.

Step-by-step explanation:

Step-by-step explanation:

The relationship is linear when the rate of change is constant. It means the sequence of the dependent variable forms an arithmetic sequence.

We see the the sequence of Projected Value is not arithmetic but geometric sequence with common ratio of 1.05.

It will have equation:

This is therefore exponential.