Answer :
Answer:
It would take 5 years for the car to have a value of less than $25,000
Step-by-step explanation:
Exponential Decaying Model
The exponential function is often used to model natural decaying processes, where the change is proportional to the actual quantity.
We have the initial value of a car is $40,000. Each year it depreciates by 10%.
Thus the first year its value is 90% of the initial value:
V1 = 90 * $40,000 / 100 = $36,000
By the second year its value is 90% of $36,000:
V2 = 90 * $36,000 / 100 = $32,400
Note the value for a year n is the original value multiplied by 90% (or 0.9) to the power of n:
[tex]Vn = $40,000 \cdot 0.9^n[/tex]
To find the number of years needed to have a value of less than $25,000, we solve the equation:
[tex]40,000 \cdot 0.9^n = 25,000[/tex]
Dividing by 40,000:
[tex]0.9^n = 25,000/40,000 = 0.625[/tex]
Taking logarithms:
[tex]n\log 0.9=\log 0.625[/tex]
[tex]n=\log 0.625 / \log 0.9[/tex]
n =4.5
We'll round up to n = 5
It would take 5 years for the car to have a value of less than $25,000