Write an exponential function for the situation below and use your equation to answer the question.

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Patricia purchases a car for $18, 995. The car depreciates at a rate of 18% annually. How much is the car worth in six years?

1 answer

To model the depreciation of Patricia's car, we can use the formula for exponential decay:

\[ V(t) = V_0 (1 - r)^t \]

Where:

  • \( V(t) \) is the value of the car after \( t \) years.
  • \( V_0 \) is the initial value of the car.
  • \( r \) is the depreciation rate (expressed as a decimal).
  • \( t \) is the number of years.

Given:

  • \( V_0 = 18,995 \)
  • \( r = 0.18 \)
  • We want to find \( V(6) \) for \( t = 6 \).

Plugging in the values:

\[ V(6) = 18,995 \times (1 - 0.18)^6 \]

Simplifying the equation:

\[ V(6) = 18,995 \times (0.82)^6 \]

Now, calculate \( (0.82)^6 \):

\[ (0.82)^6 \approx 0.384432 \]

Now multiply by the initial value:

\[ V(6) \approx 18,995 \times 0.384432 \approx 7,292.36 \]

Thus, the value of the car after 6 years is approximately $7,292.36.