Question

Does the situation below represent exponential growth or decay?(2 points)
Your car cost $42,500 when you purchased it in 2015. The value of the car depreciates by 15% annually.

The situation represents exponential

Answer 1

Exponential decay.

Reason: the car loses 15% each year, so the multiplier is 1 − 0.15 = 0.85 (<1). Value after t years: V(t) = 42,500(0.85)^t.