Question

Lana bought a sports car for $75,700. If the value of her car decreases 4.3% annually.

When using the exponential DECAY formula, what would be the value of r?

Answer 1

Given:

The initial value of the car = $75,700

Decreasing rate = 4.3%

To find:

The value of r in the exponential DECAY formula.

Solution:

The exponential decay formula is:

`y=a(1-r)^t`

Where, a is the initial value, r is the rate of decay on decimal and t is the time period.

The initial value of the car is $75,700 and its value decreases 4.3% annually. So,

`a=75,700`

`r=(4.3)/(100)`

`r=0.043`

The required exponential decay formula is:

`y=75,700(1-0.043)^t`

Therefore, the value of r in the exponential decay formula is 0.043.