Question

A car valued at $25000 depreciates 2.5% a year. Find the value of the car after 12 years?​

Answer 1

18449.96

Explanation:

Hope this helps!

Answer 2

Explanation:

In an exponential growth/decay problem, the issue is finding the value for the rate of growth or decay, b, in the formula

`y=a(b)^x` where a is the initial value and b is the growth/decay rate.

If the car is depreciating at a rate of 2.5% per year, the key is to find out how much of the value is RETAINED per year. That's the value you need for b. So instead of using .025 as our value for b, we will use 100% - 2.5% = 97.5% which in decimal form is .975. The model is

`y=25000(.975)^x`

If you are looking for the value of the car after 12 years, sub in 12 for x and solve for y:

`y=25000(.975)^(12)` and get that

y = $18449.95