Question

3

Tanner purchased a new car for $10,000. The car's value is depreciating (Decreasing) by 5% each year. If this is an exponential situation, write an equation
for this situation, then determine the new value of the car after 3 years. Round your answer to two decimal places

Answer 1

$8573.75

Explanation:

The value of the car as a function of the number of years (t) is

V = $10,000(1.00-0.05)^t

which, after 3 years, comes to V = $10,000(1.00-0.05)^3 = $8573.75