Question

Last month, Maria purchased a new cell phone for $500. The store manager told her that her new cell phone would depreciate by 70% every 6 months. Maria thinks she will want to replace her phone after a while. What will be the value (V) of her phone if she tries to trade it in after 2 years? Select all that apply.

Answer 1

Answer:

or

Explanation:

The value of her phone after t intervals of 6 months is given by the following equation:

In which V(0) is the initial value and r is the depreciation rate, as a decimal.

Last month, Maria purchased a new cell phone for $500.

This means that

The store manager told her that her new cell phone would depreciate by 70% every 6 months.

This means that

So

After 2 years:

2 years is 24 months, 24/6 = 4, so we have to find V(4).

The possible options are:

or

Explanation:

Answer 2

`V = 500(1-0.7)^(4)`

or

`V = 500(0.3)^(4)`

Explanation:

The value of her phone after t intervals of 6 months is given by the following equation:

`V(t) = V(0)(1-r)^(t)`

In which V(0) is the initial value and r is the depreciation rate, as a decimal.

Last month, Maria purchased a new cell phone for $500.

This means that
`V(0) = 500`

The store manager told her that her new cell phone would depreciate by 70% every 6 months.

This means that
`r = 0.7`

So

`V(t) = V(0)(1-r)^(t)`

`V(t) = 500(1-0.7)^(t)`

`V(t) = 500(0.3)^(t)`

After 2 years:

2 years is 24 months, 24/6 = 4, so we have to find V(4).

The possible options are:

`V = 500(1-0.7)^(4)`

or

`V = 500(0.3)^(4)`