Question

Write the exponential equation for this scenario. Mike buys a car for $45,000.00. The cars value depreciates (loses value) at a rate of 18% per year.

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Answer 1

`A=45000(0.82)^t`

Explanation:

Given data

P= 45,000

rate= 18%

Recall the expression for the compound interest

`A=P(1+r)^t`

Since we are talking of depreciation

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

Substitute

`A=45000(1-0.18)^t\\\\A=45000(0.82)^t`

Hence the exponential function is

`A=45000(0.82)^t`