Question

15) A new BMW decreases in value exponentially after it is purchased. If a new BMW is valued at $55,000 and
depreciate at a rate of 22% a year, what is the value after 4 years? After 8 years)

Answer 1

The values of BMW after 2, 4 and 8 years  according to the EXPONENTIAL FUNCTION are $33,462, $20,358.28 and $7,535.63 respectively.

Using the parameters given, we define an decreasing exponential function :

$A = A_{0} (1 - r)^{t}$

Where,

$A_{0}$ = initial amount ; r = Rate ; t = time ; A = final amount

Value after 2 years :

t = 2

A = 55000(1 - 0.22)²

A = 55000(0.78)²

A = $33,462

Value after 4 years :

t = 4

A = 55000(1 - 0.22)^4

A = 55000(0.78)^4

A = $20,358.28

Value after 8 years :

t = 4

A = 55000(1 - 0.22)^8

A = 55000(0.78)^8

A = $7,535.63

Therefore, the value of BMW after 2, 4 and 8 years are $33,462, $20,358.28 and $7,535.63 respectively.

Learn more about Exponential functions :

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