Question

In the model y=3 e^(0.02 t) , where t is measured in months and y measures the number of customers in thousands, what is the best interpretation of the coefficient 0.02?

Answer 1

Answer:

Step-by-step explanation:

Since, in the model y=3 e^(0.02 t) , where t is measured in months and y measures the number of customers in thousands, our aim is to interpret the coefficient 0.02.

Lets consider the function $g = e^{ax}$.

How much greater a much faster the function grows.

So, in this case we have a = 0.02:

$y(1) = 3 e^{0.02 * 1}$

⇔ $y (1) = 3.06$ thousands

y(2) = 3.12 thousands

The coefficient, 0.02, is very small, this means the function grows slower, and as you can see the calculations above the difference between t = 2 and t = 1 is small.