Question

A car purchased for $15,000 today will be worth 6% less each year. How much

will the car be worth at the end of 5 years? Write the exponential function to model the increase. Calculate the value of the car in 5 years

Answer 1

$11,008.56.

Explanation:

6% less each year means that the car is worth (100 - 6) = 94% or 0.94 of the previous year,

The function is:

f(t) = 15000(0.94)^t where t = the times in years.

After 5 years the value =

15000(0.94)^5

= $11008.56