Question

After a new $28,000 car is driven off the lot, it begins to depreciate at a rate of 18.9% annually.

Which function describes the value of the car after t years?

A. C(t)=28,000(0.811)t
B. C(t)=28,000(1.575)t
C. C(t)=28,000(0.158)t
D. C(t)=28,000(0.189)t

Answer 1

C(t) = $28,000(0.811)^t (Answer A)

Explanation:

The value of the car is decreasing. Thus, by the end of the first year of ownership, the car will have the value $28,000(1 -0.189)^1, where the "-0.189" represents DECAY instead of GROWTH.

Please use " ^ " to indicate exponentiation.

Then the desired formula is C(t) = $28,000(0.811)^t (Answer A)