Given:
Price of a new car = 25000
Depreciation rate = 8.25% = 0.0825
Time = 15 years.
To find:
The value of the car after 15 years.
Solution:
The exponential decay model is
[tex]y=a(1-r)^t[/tex]
Where, a is the initial value, r is the rate of decay and t is number of years.
Putting a=25000, r=0.0825 and t=15 in the above formula.
[tex]y=25000(1-0.0825)^{15}[/tex]
[tex]y=25000(0.9175)^{15}[/tex]
[tex]y=25000(0.274847)[/tex]
[tex]y=6871.175[/tex]
Therefore, the value of the car after 15 years will be 6871.175.
