How much will the car be worth?

How much will a car purchased in 2014 for $35,750 be worth in 2022, if it is depreciated at 10.5% each year?

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This is an exponential decay problem.

The formula for exponential decay is:

where y = total amount
a = initial amount
b = rate of decay {as a decimal}
x = time in years

The rate of decay, b, is:
1 - 0.105 {changed 10.5% to a decimal and subtracted from 1}
= 0.895 {subtracted}

​The car will be worth approximately $14,718.28 in 2022.

Ask Algebra House
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