Question

Tisha buys a car for $30,319. Her car immediately starts depreciating, losing 10% of its value every year. How much will the car be worth in 2 years?round your answer to the nearest cent

Answer 1

In this problem

we have an exponential decay function of the form

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

where

y is the value of the car

x is the number of years

a is the initial value

r is the rate

we have

a=$30,319

r=10%=10/100=0.10

substitute given values

$\begin{gathered} y=30,319(1-0.10)^x \\ y=30,319(0.90)^x \end{gathered}$

For x=2 years

substitute

$y=30,319(0.90)^2$

y=$24,558.39