Question

What is the value, after 7 years, of a 2014 Ford Mustang that originally costs $25,000.00 if it depreciates at a rate of 8% per year? Round your answer to the nearest dollar.

Answer 1

$25,000 x 8% =$2,000 x 7 years =$14,000

$25,000 - $14,000 = $11,000

Answer 2

For this case we have an exponential function of the form:

$y = A (b) ^ x$

Where,

• A: original cost
• b: rate of change
• x: number of years

Therefore, replacing values we have:

$y = 25000 * (0.92) ^ 7\\y = 13946$

Answer:

the value, after 7 years, of a 2014 Ford Mustang is:

$y = 13946$