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?

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Answer 1 · 2017-04-12T12:31:32

Let me start with exponential decay. #r=-0.2229#

Your equation will be
#V=Vo*e^(-r*t)#
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:

#ln (525/1600)=-r*5#
#r=-0.2229# (approximately).

r is negative because your lawnmover depreciates with time.