Question

You buy a cell phone for $ 200 . The value y decrease by 30% each year. What would be the value of the cell phone in 2 years?

Answer 1

$98

Step-by-step explanation:

It is the "Correct Answer"

Answer 2

The present value after 2 years is $98

Step-by-step explanation:

Given

`a = 200`

`r = 30\%`

`t = 2`

Required

Determine the new value

This is calculated using:

`y = ab^t`

Where b =

`b = 1 - r`

This gives:

`b = 1-30\%`

`b = 1-0.30`

`b = 0.70`

So:

`y = ab^t`

`y =200 * 0.70 ^2`

`y =98`

The present value after 2 years is $98