Kevin recently purchased a new car for $37,044.00. The car he bought is expected to decrease in value 5% each year. Assuming this decay forecast holds, which function will show the value of Kevin's car in t years?

C(t) = $37,044(-0.95)t
C(t) = $37,044(0.95)t
C(t) = $38,896.2000000000t
C(t) = $37,044(1.05)t

Question

Kevin recently purchased a new car for $37,044.00. The car he bought is expected to decrease in value 5% each year. Assuming this decay forecast holds, which function will show the value of Kevin's car in t years?

C(t) = $37,044(-0.95)t
C(t) = $37,044(0.95)t
C(t) = $38,896.2000000000t
C(t) = $37,044(1.05)t

igreen · Answer

Same as the last one.

5% = 0.05

1 - 0.05 = ?

anonymous · Answer

Do you basically subtract 1 from each percentage? It would be 0.95.

igreen · Answer

Yes, because it says it decreased by that, but an increase would be adding to it.

So we have:

$C(t) = 37,044(0.95)^t$

igreen · Answer

Remember, if it's less than 1, it decreases, if it's more than 1 it increases, it's never negative in there.

anonymous · Answer

Wow, I didn't understand it at first but I think I know the concept now. I appreciate the help once again, @iGreen :)

anonymous · Answer

Thank you for the tip.