Question

the price of a computer component is decreasing at a rate of 9% per year. if the component costs $60today ,what will it cost in there years ?

Answer 1

The exponential decay formula is:

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

where y is the final cost, a is the initial cost, r is the annual decreasing rate (as a decimal), and t is the time in years.

Substituting with a = $60, r = 0.09, and t = 3 years, we get:

$\begin{gathered} y=60\cdot(1-0.09)^3 \\ y=60\cdot(0.91)^3 \\ y=60\cdot0.75 \\ y=45.21 \end{gathered}$

It will cost $45.21 in 3 years