Question

an investment of $8,200 loses value at a rate of 2% per year. what is the value of the investment after 7 years?
help please

Answer 1

first lets find 2% of 8200
can you do that?

Answer 2

@gabbie112013 ?

Answer 3

164
i think

Answer 4

@Mehek14
is that right?

Answer 5

yes

Answer 6

now subtract 8200-164

Answer 7

8036

Answer 8

so that was for the first year

Answer 9

now for the second find 2% of 8036

Answer 10

160.72

Answer 11

8036-160.72?

Answer 12

-7875.28??

Answer 13

7875.28 <-- 2nd yr

Answer 14

btw this is a long process

Answer 15

now find 2% of 7875.28

Answer 16

-157.50 ?

Answer 17

7875.28 - 157.5?

Answer 18

7717.78

Answer 19

7717.78 <--- 3rd yr

Answer 20

2% of 7717.78?

Answer 21

@Mehek14 is this exponential decay ?

Answer 22

no, its a geometric series.

if an investment of X loses its value at a rate of Y% per year, then

Year 0: X
Year 1: X(1-Y/100)
Year 2: X(1-Y/100)*(1-Y/100)
Year 3: X(1-Y/100)*(1-Y/100)*(1-Y/100)
Year 4: X(1-Y/100)*(1-Y/100)*(1-Y/100)*(1-Y/100)

after n years, it is worth: X(1-Y/100)^n

this is simple compounding.

Answer 23

thanks for the help you guys :)
@Mehek14
&&
@IrishBoy123