Question

A vehicle purchased for $22,400 depreciates at a constant rate of 9%. Determine the approximate

value of the vehicle 11 years after purchase. Round to the nearest whole dollar.

Answer 1

To determine the approximate value of the vehicle 11 years after purchase, we can use the formula for exponential decay and calculate the expression.

Step-by-step explanation:

To determine the approximate value of the vehicle 11 years after purchase, we can use the formula for exponential decay:

V = P(1 - r)^n

where V is the final value, P is the initial value, r is the decay rate, and n is the number of time periods.

In this case, P = $22,400, r = 0.09 (9% as a decimal), and n = 11. Plugging these values into the formula:

V = $22,400(1 - 0.09)^{11}

Calculating this expression, the approximate value of the vehicle 11 years after purchase is $7,411.

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