Question

Solve the equation of exponential decay.

A company's value decreased by 11.2% from 2009 to 2010. Assume this continues. If the company had a value of
$9,220,000 in 2009, write an equation for the value of the company years after 2009

Answer 1

$9,220,000(0.888)^t

Explanation:

Model this using the following formula:

Value = (Present Value)*(1 - rate of decay)^(number of years)

Here, Value after t years = $9,220,000(1 -0.112)^t

Value after t years = $9,220,000(0.888)^t