Question

Doug purchased land for $8,000 in 1995. The value of the land depreciated by 4% each year thereafter. Use an exponential function to find the approximate value of the land in 2002

A - $5,760
B - $5,771
C - $6,012
D - $6,262

Answer 1

Option C.
`\$6,012`

Explanation:

we know that

The formula to calculate the depreciated value is equal to

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

where

V is the the depreciated value

P is the original value

r is the rate of depreciation in decimal

t is Number of Time Periods

in this problem we have

`t=7\ years\\ P=\$8,000\\ r=0.04`

substitute in the formula above

`V=\$8,000(1-0.04)^(7)=\$6,012`