Five years ago, you purchased a riding lawn mower for $1600. Recently, you resold the mower for $525. Assume that the value of the mower decays exponentially with time. How do you write an exponential decay model?
1 Answer
Apr 12, 2017
Let me start with exponential decay.
Explanation:
Your equation will be
V is today's value and Vo is initial value (of an item, good, etc.).
Since you know t, you can compute r (exponential decay (or depreciation (in economy)) coefficient) by:
r is negative because your lawnmover depreciates with time.