Question

Doug purchased land for $8,000 in 1995. The year value of the land depreciated by 4% each year thereafter. Use an exponential function to find the approximate value of the land in 2002.

Answer 1

Option C. $6,012

Explanation:

we know that

The formula to calculate the depreciated value is equal to

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

where

V is the the depreciated value

P is the original value

r is the rate of depreciation in decimal

t is Number of Time Periods

in this problem we have

t = 7 years

P = $8,000

r = 0.04

substitute in the formula above

`V = 8,000(1-0.04)^(7) = 6,012`

Hope this helps :)