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22 votes
22 votes
Can you help me with growth and Decay models

User Roland Keesom
by
3.0k points

1 Answer

13 votes
13 votes

Of course, you can. Happy birthday, Keke!

Best wishes and blessings!

Can you read my messages here? Ok, Keke, Understood.

Let me review the image you uploaded, please.

Ok, Keke, let's solve the problem of depreciation.

Year 1: Cost of the car $ 30,000 - Depreciation = 0.18 * 30,000 = 5,400, Balance = 24,600 (30,000 - 5,400)

Part 1:

Therefore, the formula is:

• V = C − (1 − r)^t, ,where

,

• V = Value of the car after t years

,

• C = Cost of the car when it was purchased

,

• r = Depreciation rate (0.18)

,

• t = Years of usage of the car

Part 2:

Let's calculate the cost of the car after 10 years, using the formula we wrote above:

V = C * (1 − r)^t

V = 30,000 * (1 − 0.18)^10

V = 30,000 * 0.82^10

V = $ 4,123.44

Do you understand the solution?

The equation that I wrote above is the model. Highlighted and underlined.

Keke, remember you have two parts. Do you have it now?

Is it clear now?

If you don’t need any further explanation, I’ll go ahead and end our session. Feel free to let me know how I did by rating our session - all feedback is welcome and appreciated. Thanks for coming today!

Remember that the solutions from tutors are always available in your profile! Happy birthday!

User Alee
by
2.5k points