Asked by jk

Sam bought a new car for $26,500. The car depreciates approximately 13% of its value each year.

A) What is the decay factor for the value of this car?
b)  Write an equation to model the decay value of this car?
c)  What will the value of the car be in 10 years?
Answered by Henry
a. DF =(1-r)^t
DF = Decay Factor.
r = Depreciation rate expressed as a
decimal.
t = Time in years.

b. V = Vo*DF = Vo*(1-r)^t.
V = Value after t years.
Vo = Initial Value or value when new.

c. V = 26,500(1-0.13)^10 = $6,583.22



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