Question

Write a function in terms of t that represents the situation. A company profit of $20,000 decreases by 13.4% each year

Answer 1

`P(t)=20000(0.866)^(t)`

Explanation:

we can use formula

`P(t)=P_0(1-r)^(t)`

where

P(t) is the profit after t years

Po is initial profit or profit is at t=0

r is decreasing rate

t is time in years

we are given

A company profit of $20,000 decreases by 13.4% each year

so,

Po=20000

r=13.4%=0.134

now, we can plug values

`P(t)=20000(1-0.134)^(t)`

we get

`P(t)=20000(0.866)^(t)`