Question

The value, V, of a $25000 vehicle after y years is given by V = 25000 (0.85)^y

What is the rate of depreciation?
What will the car be worth after 5 years?

To the nearest month, how long would it take to reduce the vehicle’s value to 10% of its original amount?

Answer 1

The rate of depreciation would be 15%
(.85= 1 - .15)

after 5 years
V = 25000(.85)^5 = ...

last part:
when V = 2500
25000(.85)^y = 2500
.85^y = .1
take log of both sides
log .85^y = log .1
y log.85 = log.1
y = log.1/log.85 = 14.168 years
= 14 years and appr 2 months