Question

An equation for the depreciation of a car is given by y=A(1-r)t where y=current value of the car.A=original cost r=rate of depreciation and t=time in years. The value of a car is half what it originally cost. The rate of depreciation is 10%. Approximately how old is the car?

Answer 1

Answer: Approximately 6.58 years old

The more accurate value is 6.57881347896059, which you can round however you need. I picked two decimal places.

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Explanation:

Let's pick a starting value of the car. It doesn't matter what the starting value, but it might help make the problem easier. Let's say A = 1000. Half of that is 1000/2 = 500.

So we want to find out how long it takes for the car's value to go from $1000 to $500 if it depreciates 10% per year.

The value of r is r = 0.10 as its the decimal form of 10%

t is the unknown number of years we want to solve for

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y = A(1 - r)^t

500 = 1000(1 - 0.1)^t

500 = 1000(0.9)^t

1000(0.9)^t = 500

0.9^t = 500/1000

0.9^t = 0.5

log( 0.9^t ) = log( 0.5 )

t*log( 0.9 ) = log( 0.5 )

t = log( 0.5 )/log( 0.9 )

t = 6.57881347896059

Note the use of logs to help us isolate the exponent.