Question

The price of a rare collection car has increased exponentially

over the past few years with a rate of increase estimated at 5% per year.
At the start of 2015 the value of the car was estimated at £265000.
Estimate the value of the car at the start of 2010.
Round your answer to 3 significant figures.​

Answer 1

208,000

Explanation:

Answer 2

Answer: £208,000

Explanation:

Hi, to answer this question we have to apply an exponential growth function:

A = P (1 + r) t

Where:

p = original price

r = increase rate (decimal form)

t= years (2015-2010 =5 years)

A = price after t years

Replacing with the values given:

265,000 = p (1+ 0.05)^5

Solving for p

265,000 = p (1.05)^5

265,000 = p (1.05)^5

265,000/ (1.05)^5 =p

p = £207,634. =208,000 (rounded)

Feel free to ask for more if needed or if you did not understand something.