Question

The price of a computer component is decreasing at a rate of

14
14​% per year. State whether this decrease is linear or exponential. If the component costs ​$
90
90 ​today, what will it cost in three​ years?
Is the decline in price linear or​ exponential?

linear


exponential

What will the component cost in three​ years?
​$

nothing
​(Round to the nearest cent as​ needed.)

Answer 1

• exponential
• $57.25

Explanation:

a) Each year, the price is multiplied by (1 - 14%) = 0.86. After t years, the price will be 0.86^t times what it was in the beginning. This function is an exponential function.

__

b) After 3 years, the price will be ...

$90×0.86^3 ≈ $57.25