Question

Michael purchased stereo equipment for $2500. His wife claims that was not a smart investment because stereo equipment decreases in value at a rate of 9% per year. What is the exponential equation that represents this situation, with t representing years.

Answer 1

`P(t) = 2500(0.91)^t`

Explanation:

Hello!

An exponential equation can be written in the form of
`f(x) = ab^x`.

A would be the starting value, b would be the multiplier, and x would be how many times that event occurs.

In this case, t is time in years, which would take the place of x.

2500 is the starting value, which would be a.

And a decrease of 9% is a multiplier of 0.91. (1 - 0.09 = 0.91)

The equation would be
`P(t) = 2500(0.91)^t`.