Assume that the value of the car decreases exponentially: V = V_0 * e^(-a *t), where a is the decay factor and t is the time in years. After the first year t = 1, V = 0.87 V_0 and e^(-a) = 0.87.

a) the decay factor is a = - ln(0.87) = 0.139

b) the equation is V = 26500*e^(-0.139*t)

c) in 10 years the value of the car will be 26500*e^(-1.39) = $6600.

Apr 7th, 2015

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