Question

Amy makes an initial investment of $5000. The investment loses 13.5% each year. Find the amount Amy has at the end of 8 years.

Answer 1

Answer:

$\ 1,567.11$

Step-by-step explanation:

we know that

The equation of a exponential decay function is given by

$y=a(1-r)^x$

where

y is the value of the investment

x is the number of years

a is the initial value

r is the rate of change

we have

$a=\ 5,000\\r=13.5\%=13.5/100=0.135$

substitute

$y=5,000(1-0.135)^x$

$y=5,000(0.865)^x$

Find the amount Amy has at the end of 8 years

For x=8 years

substitute the value of x

$y=5,000(0.865)^8=\ 1,567.11$