14/09/2015 ALEKS Kwadwo Amankwa - 09/14/2015 3:56:21 AM PDT - Copyright 2015 UC Regents and ALEKS Corporation

Kwadwo Amankwa - 09/14/2015 3:56:21 AM PDT

PreCalculus / Amankwa, Kwadwo (Amankwa)
1.

Finding a final amount in a word problem on exponential growth or decay

A car is purchased for $20,500. After each year, the resale value decreases by 35%.
What will the resale value be after 4 years?

Use the calculator provided and round your answer to the nearest dollar.

The resale value decreases by 35% each year.

This means that the resale value is 65% of the previous year's resale value.

So, the resale value after the first year is given by the following.

20,5000.65
Similarly, the resale value after the second year is as follows.

2
20,5000.65 0.65 = 20,5000.65
Here is the resale value after the third year.

2 3
20,5000.65 0.65 = 20,5000.65
t
After t years, the resale value will be 0.65 times the original value.
So, the resale value after t years is given by the following.

t
20,5000.65

In this problem, we need to find the resale value after 4 years.

4
20,5000.65 = 3659.37

Rounded to the nearest dollar, we get $3659 .

The answer is $3659 .

Explanation (alternate):

Suppose that a quantity decreases each year by a fixed percentage.

Let a be the starting amount and let r be the percent decrease expressed as a decimal.
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14/09/2015 ALEKS Kwadwo Amankwa - 09/14/2015 3:56:21 AM PDT - Copyright 2015 UC Regents and ALEKS Corporation

Then, the amount left after t years is given by the following formula.
t
a 1r

In this problem, we need to find the resale value after 4 years.

Here, a = 20,500 , r = 0.35 , and t = 4.
Using these values in the above formula, we get the following.

4 4
20,500 1 0.35 = 20,500 0.65
= 3659.37

Rounded to the nearest dollar, we get $3659 .

The answer is $3659 .

Copyright 2015 UC Regents and ALEKS Corporation

https://www.aleks.com/alekscgi/x/Isl.exe/1o_u-IgNsIkwVvH23goJ62qV2MzozURpazBUVpfpndjuhACwtG986MNSwXZ0QRhY0uKnYl 2/2