A motorcycle cost $12,000 when it was purchased. The value of a motorcycle decreases by 6% each year. Find the rate of decay each month and select the correct answer below.

Question

anonymous · Answer

Wheres the answer choices

anonymous · Answer

I know you can use this formula A(T)=P+(1+r)^r/t or something like that lol

michele_laino · Answer

I'm sorry, I'm not good with financial mathematics

anonymous · Answer

:( Aw! It's fine:)

anonymous · Answer

Do you know anyone that can help?

anonymous · Answer

@welshfella @mathmate

mathmate · Answer

It depends on the definition of terms.
If it depreciates 6% a year, most people will say that it depreciates 6/12=0.5% a month.
However, it is not true, because 0.5% a month will end up with (1.005)^12=6.1678%.
To get the real monthly depreciation, we need to solve the equation
(1+i)^12=1.06
Take logs on both sides, and solve for i, we get
i=e^(log(1.06)/12)-1=.004867550565343=0.486755%
(I usually write log instead of ln.  I write log10 when it's to the base 10).
Check:
(1.004867550565343)^12=1.0600000   so ok.