Question

The price of products may increase due to inflation and decrease due to depreciation. Marco is studying the change in the price of two products, A and B, over time.

The price f(x), in dollars, of product A after x years is represented by the function below:

f(x) = 12500(0.82)x

Part A: Is the price of product A increasing or decreasing and by what percentage per year? Justify your answer. (5 points)

Part B: The table below shows the price f(t), in dollars, of product B after t years:


t (number of years) 1 2 3 4
f(t) (price in dollars) 5600 3136 1756.16 983.45


Which product recorded a greater percentage change in price over the previous year? Justify your answer.

Answer 1

Part A:

The price of product A is determined by the function f(x) = 12500(0.82)^x. To determine whether the price is increasing or decreasing, we can look at the behavior of the function as x increases.

When x increases by 1 year, the value of the function is:

f(x+1) = 12500(0.82)^(x+1) = 10250(0.82)^x

To find the percentage change in price per year, we can calculate:

[(f(x+1) - f(x)) / f(x)] * 100%

= [(10250(0.82)^x - 12500(0.82)^x) / 12500(0.82)^x] * 100%

= -0.16 * 100%

= -16%

Therefore, the price of product A is decreasing by 16% per year.

Part B:

To determine which product recorded a greater percentage change in price over the previous year, we need to calculate the percentage change in price for each product from year to year.

For product B, the percentage change in price from year to year is:

From year 1 to year 2: [(f(2) - f(1)) / f(1)] * 100% = [(3136 - 5600) / 5600] * 100% = -43.14%

From year 2 to year 3: [(f(3) - f(2)) / f(2)] * 100% = [(1756.16 - 3136) / 3136] * 100% = -44.06%

From year 3 to year 4: [(f(4) - f(3)) / f(3)] * 100% = [(983.45 - 1756.16) / 1756.16] * 100% = -43.99%

For product A, we already determined that the percentage change in price per year is -16%.

Therefore, product A recorded a smaller percentage change in price over the previous year compared to product B.

Explanation: