Question

A certain model of car has been declining in popularity, and one automotive executive predicts that the sales of the vehicle will decrease by 5% per year. If the

company sold 25,000 cars this year, about how many cars will the company sell 5 years from now?
The formula for this decline is shown by the function below where a is the initial amount, r is the rate of decrease expressed as a decimal, t is the time
elapsed, and y is the final amount.
y= a(1-r)^t

Answer 1

Explanation:

The formula for the decline in the sales of the vehicle is shown by the function below

y= a(1-r)^t

where a is the initial amount,

r is the rate of decrease expressed as a decimal,

t is the time elapsed,

and y is the final amount.

If the company sold 25,000 cars this year, then the number of cars that the company will sell in 5 years from now would be

y = 25000 (1-0.05)^5

y = 25000 × 0.95^5 = 1$19344.

cars

Answer 2

19,345

Explanation:

Putting the given numbers into the given formula and doing the arithmetic, we have ...

y = 25,000×(1 -0.05)^5 = 25,000×0.773781 ≈ 19,345

Sales in 5 years are estimated to be 19,345 cars.