Question

A new car costs $23000. The value decreases by 15% each year.(a) Write the exponential model to represent the cars value after t years. (b) To the nearest dollar, how much will the car be worth after 4 years?

Answer 1

(a) 23000(1-15%)^t

(b) about 12006.14375

Explanation:

(a) There's a formula for this problem y = A(d)^t where, A is the initial value you are given, d is the growth or decay rate and t is the time period. So, in this case, as the car cost is decreasing it is a decay problem and we can write the formula as such; y = A(1-R)^t

And with the values, we get the exponential model 23000(1-15%)^t

(b) From question (a) we already have the model and the time period given here is 4 years. So putting it in the formula we get,

23000(1-15%)^4

=23000(1-15/100)^4

=23000(0.85)^4

=23000x0.52200625

=12006.14375 (Ans)