16Hit1600
Advanced MathMediumDecay rate from an exponential model

Advanced Math practice question

The value of a car, in dollars, t years after it is bought is modelled by V(t) = 12,000(0.85)ᵗ. By what percent does the car's value decrease each year, according to the model?

Answer: 15

Each year the value is multiplied by 0.85, so it keeps 85% of its value and loses 100% − 85% = 15%.

Common wrong answers

If you answered 85
85% is the fraction of the value that REMAINS each year, not the decrease.
If you answered 1800
1,800 is 15% of 12,000, the dollar loss in the FIRST year only. The question asks for the percent.
If you answered 0.85
0.85 is the decay factor. The percent decrease is 1 − 0.85 = 0.15 = 15%.

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