Question

A $22,000 truck depreciates 14% per year. Find the value of the truck after 8 years. Round to the nearest cent.

Exponential Growth
Exponential Decay
Compounded Continuously
Half-Life
Doubling

Answer 1

`\$6,582.79`

Exponential Decay

Explanation:

we know that

The equation of a exponential decay function is given by

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

where

y is the value of the truck

x is the number of years

a is the initial value

r is the rate of change

we have

`a=\$22,000\\r=14\%=14/100=0.14`

substitute

`y=22,000(1-0.14)^x`

`y=22,000(0.86)^x`

Find the value of the truck after 8 years.

For x=8 years

substitute in the exponential decay function

`y=22,000(0.86)^8=\$6,582.79`