Question

A person purchased a used Chevrolet

Cavalier for $4500. The car is expected to
decrease in value by 22% each year over
the next several years.
What would be the decay factor of a model
that would represent the value of the car?
1.22
0.78
-1.22
0.22

Answer 1

• B. 0.78

Explanation:

With 22% decrease the value after the year is:

• 100% - 22% = 78% of the current value

To find 78% we need to multiply the current value by 0.78.

The same number is multiplied each year to find the decreased value.

The formula for the car would be:

• P = 4500*0.78ˣ

The decay factor is 0.78

Correct choice is B