Question

2 points

Answer 1

Given:

Initial value of new car = $17,500

Depreciation rate = 4.6%

To find:

The value of car after 4 years.

Solution:

The exponential decay model is

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

where, a is initial value, r is decreasing rate and t is time in years.

Substitute a=17500, r=0.046 and t=4 in the above equation.

$y=17500(1-0.046)^4$

$y=17500(0.954)^4$

$y=17500(0.8283111)$

$y=14495.44425$

$y\approx 14495.44$

The value of car after 4 years is $14495.44.

Therefore, the correct option is D.