Question

A car with an initial cost of $23,000 is decreasing in value at a rate of 8% each year. Write the exponential decay function described in this situation. Then use your function to determine when the value of the car will be $15,000, to the nearest year.

Answer 1

Explanation:

We would apply the formula for exponential decay which is expressed as

A = P(1 - r/n)^ nt

Where

A represents the value after t years.

n represents the period for which the decrease in value is calculated

t represents the number of years.

P represents the value population.

r represents rate of decrease.

From the information given,

P = 23000

r = 8% = 8/100 = 0.08

n = 1

Therefore, the exponential decay function described in this situation is

A = 23000(1 - 0.08/n)1)^ 1 × t

A = 23000(0.92)^t

If A = 15000, then

15000 = 23000(0.92)^t

0.92^t = 15000/23000 = 0.6522

Taking log of both sides to base 10

Log 0.92^t = log 0.6522

tlog 0.92 = log 0.6522

- 0.036t = - 0.1856

t = - 0.1856/- 0.036

t = 5 years to the nearest year