After 4 years of depreciation at a rate of 5% per year, the value of the article can be calculated using the formula for exponential decay, which is:
After 4 years of depreciation at a rate of 5% per year, the value of the article can be calculated using the formula for exponential decay, which is:
(A) 10870
(B) 9774
(C) 8990
(D) 9765
Solution:Using the formula for exponential decay:
V = P x (1 - r)^tIn our example, we have r = 0.05, t = 4, and we are given Plugging in the numbers: V = 12,000 × (0.95)^4
V = 12,000Answer: (B) 9774