Question

A house is purchased for $150,000 in 2002. The value of the house

depreciates at a rate of 7%. How much is the house worth in 2013? *
Growth:
Decay:
y=a(1+r)*
y= a(1-r)*
a = initial amount before measuring growth/decay
r = growth/decay rate (often a percent)
X = number of time intervals that have passed

Answer 1

9514 1404 393

Answer:

$67,516

Explanation:

"Depreciates" means the value is getting smaller. The function that describes the situation is a decay function:

y= a(1-r)^x

Here, a=150000, r = 0.07, and x=11. The value is predicted to be ...

y = 150000(1 -0.07)^11 = 150000(0.93^11) = 67,515.53

The house is worth about $67,516 in 2013.