Question

A car bought for $13,000 depreciates at a rate of 15% per year. Use an exponential function to find the value of the car after 5 years.
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Answer 1

Answer:

Answer is $5,768.17

Step-by-step explanation:

Equation is as follows:

13,000(1-0.15)^5  =

13000(0.85)^5 = 13000x0.44370531  = 5,768.17 (rounds up)

.

Answer 2

Answer:

$ 11093

Explanation:

Recall that the formula for compound interest is:

A = P ( 1 + r/ n ) n ( t )  

−−−−−−−−−−−−−−−−−−−−−−  

where:

A =  future value

P  =  principal (starting) amount

r  =  annual interest rate, expressed as a decimal

n  =  number of times the interest is compounded in a year

t  =  number of years compound interest occurs for

1 . Start by substituting your known values into the formula. Note that the annual interest rate is  − 0.15  since the car depreciates (becomes lower in value) each year.

A = 25000 ( 1 + − 0.15 1 ) 1 ( 5 )  

2 . Solve for  A .

A = 25000 ( 0.85 ) )5

A = 11092.63

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A ≈ $ 11093 a    

−−−−−−−−−−−−−−−