f(x) = 23,000(0.92)^x shows how the value of a new car will depreciate over x years

Question

What does 23,000 represent

Answer 1

In the equation \( f(x) = 23,000(0.92)^x \), the value \( 23,000 \) represents the initial value or purchase price of the new car at year \( x = 0 \). This is the starting amount before any depreciation occurs. As the years go by, the value of the car decreases according to the depreciation factor of \( 0.92 \) for each year \( x \).