Question

A cell phones was purchased for $400 and depreciates at a rate of 17% per year. How much is the cell phone worth after 4 years? Round to the nearest cent .

Answer 1

1) Gathering the data

Cell phone

$400

Depreciates at -17% yearly

Period: 4 yrs

2) Let's write an exponential function to calculate that depreciation:

y = The brand new price x (depreciation rate)^time

17%= 0.17

`\begin{gathered} y=400(1-0.17)^4 \\ y=400(0.83)^4 \\ y=189.83 \end{gathered}`

3) So 4 years from the data of the purchase, the cell phone worths $189.83