Question

The price, E.P, of a car is £20 000 in 2019.

The price is expected to decrease by 5% each year after 2019.
Write a formula for P in terms of n, where n is the number of years after 2019.
(2 marks)

Answer 1

The formula for the price of the car, P, in terms of the number of years after 2019, n, can be written as:

P(n) = £20,000 x (1 - 0.05n)

Here, £20,000 is the initial price of the car in 2019, and 0.05 represents the 5% decrease in price each year.

So, if n = 2, for example, the price of the car in 2021 would be:

P(2) = £20,000 x (1 - 0.05(2)) = £20,000 x 0.95 = £19,000

And if n = 5, the price of the car in 2025 would be:

P(5) = £20,000 x (1 - 0.05(5)) = £20,000 x 0.95^5 = £13,532

Explanation: