The value of a car is depreciating at a rate

Jenny Branch

Jenny Branch

Answered question

2022-01-30

A car's value decreases at a rate of 5% annually. The car was worth $32,000 in 2010. Find the car's 2013 market value.

Step 1: Decide whether it is growing or decaying 
Step 2: Solve for the rate: 
Step 3: solve

Answer & Explanation

eris0cg

eris0cg

Beginner2022-01-31Added 13 answers

Given : worth of car is 32,000
Rate of depreciation is 5% year.
since the car value is depreciating . It is an exponential decay function.
Rate = 5%=0.05
Exponential decay formula is
A=P(1r)t where P is the intitial value
r is the rate
t is the time period
p=32000, r=0.05, t=2013-2010=3 years
A=P(1r)t where P is the intitial value
A=32000(1-0.05)3
A=32000(0.857375)
A=27436
The value of car in 2013 is $27,436

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