Question

on your birthday you receive a pda for $300. the value of the pda decreases by 20% each year. Whatt will its value be 4 years from now?

Answer 1

This can function like a simple interest problem because there's a principal ($300), a rate (20% decrease or -0.2 as a decimal each year), and a time (4 years).

I = Principal x rate x time = (300)(-0.2)(4) = -240
In 4 years, the PDA loses $240 worth of value. So it has a $60 value now (300 - 240).

NOW, that's assuming that the percent decrease is based on the $300 every year. If the percent decrease is based on the value each year, then it's different.

Answer 2

cool
thanks:)

Answer 3

wait im guessing the percent decreases each year based on the value cause it says "decreases by 20% each year"

Answer 4

Yeah, see that becomes a question of whether you lose the same amount of money each year or different. I did it where it was the same each year. I'll do one for different:

Do the simple interest function for the 1 year.

I = 300 (-.2)(1) = -60
In the first year, the pda loses 60 of value, so its at 240 now. That becomes your new principal. Do it for another year.
I = 240 (-.2)(1) = -48
In the second year, the pda loses 48 of value, so its at 192 now. That becomes your new principal. Do it for another year.
I = 192 (-.2)(1) = -38.40
In the third year, the pda loses 38.40 of value, so its at 153.60 now. That becomes your new principal. Do it for the fourth year. This is the last one.
I = 153.60(-.2)(1) = 30.72
In the fourth year, the pda loses 30.72 of value, so its at $122.88 after four years.

Answer 5

yeah i got $122.88 but idk which answer is correct

Answer 6

Well, I'd imagine that the second one would be the way to go because values of things of one year are not the same as they are for other years. Personally, I think the question is not worded well enough to where neither answer can be considered incorrect. I'd talk to your teacher and see what he/she wants.

Answer 7

yeah I hate it when questions are worded badly
it just confuses people who are already having trouble with math