Lana bought a sports car for $75,700. If the value of her car decreases 4.3% annually.
When using the exponential DECAY formula, what would be the value of r?

Answer :

Given:

The initial value of the car = $75,700

Decreasing rate = 4.3%

To find:

The value of r in the exponential DECAY formula.

Solution:

The exponential decay formula is:

[tex]y=a(1-r)^t[/tex]

Where, a is the initial value, r is the rate of decay on decimal and t is the time period.

The initial value of the car is $75,700 and its value decreases 4.3% annually. So,

[tex]a=75,700[/tex]

[tex]r=\dfrac{4.3}{100}[/tex]

[tex]r=0.043[/tex]

The required exponential decay formula is:

[tex]y=75,700(1-0.043)^t[/tex]

Therefore, the value of r in the exponential decay formula is 0.043.

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