Question

Jenna bought a bike for $200. The value of the bike decreases by 5% each year. Write an equation to model the situation.

Answer 1

This is an exponential function. Since each year the value of the bike decreases by 5%, each year, the value of the bike is 100%-5%=95% of it's original value. So after x years, the value of the bike would be 200(0.95)^x.

Answer 2

(200 - (200 x 5 / 100))^Y

Explanation:

As the initial value of the bike is $200, that would be a fixed number in our equation. Each year, this will lose 5% of its value, therefore, it would be another fixed value in it. Then, we have to exponentiate it by the number of years that have passed since the initial value (Y). As a result, the equation to model the situation would be this one:

(200 - (200 x 5 / 100))^Y