Question

The equation V=31600(0.92)tV=31600(0.92)t represents the value (in dollars) of a car t years after its purchase. Use this equation to complete the statements below.

Answer 1

Notice that:

$0.92=1-0.08.$

Therefore, we can rewrite the given equation as follows:

$V=31600(1-0.08)^t.$

From the above equation, we get that the price of the car is decreasing an 8% per year.

Evaluating the given equation at t=0, we get the purchase price:

$V(0)=31600(0.92)^0=31600(1)=31600.$

Answer:

The value of this car is decreasing at a rate of 8 percent per year.

The purchase price of the car was 31600 dollars.