#1

For each of the following situations: write an exponential growth or decay function and answer the question posed.

Ex) A tool and die business purchases a piece of equipment for $250,000. The value depreciates at the rate of 12% each year. What is the value of the equipment after 5 years?

Ex) A tool and die business purchases a piece of equipment for $250,000. The value depreciates at the rate of 12% each year. What is the value of the equipment after 5 years?

#2

dunno about the growth or decay bit.

But 250,000 -(250,000*0.12) = Year 1

Year 1 - (Year 1*0.12) = Year 2

etc

dont know if thats any help...

edit - Does it depreciate in a reducing balance or straight line method?

But 250,000 -(250,000*0.12) = Year 1

Year 1 - (Year 1*0.12) = Year 2

etc

dont know if thats any help...

edit - Does it depreciate in a reducing balance or straight line method?

#3

Hm...PeRT comes to mind.

principle times the natural number to the power of (the rate of interest times the time)

250,000*e^(-.12*5)

That gives you 137,202.91

I have no clue if that is right or not, but I always knew PeRT could be used for something or other to do with math.

principle times the natural number to the power of (the rate of interest times the time)

250,000*e^(-.12*5)

That gives you 137,202.91

I have no clue if that is right or not, but I always knew PeRT could be used for something or other to do with math.

#4

Find 12% of 250,000, take it away, find 12% of that answer,l take away.

Repeat.

Repeat.

#5

^you guys, he needs to write a FUNCTION. They don't just want to know the $$, they want a function for it!

#6

haha yeah thanks jahjahwarrior. i don't think PeRT works here because it has nothing to do with compounding money. i could be wrong, but i'm pretty sure i can't use that.

*Last edited by Grunge at Nov 14, 2007,*

#7

PeRT is the formula used for continously compounding money. I don't know what you mean when you say it has "nothing to do with" compounding money. If you are continuously compounding, you use PeRT. If you are only compounding once a year, you use

final value= P(1+r)^n

or 250,000(1+-.12)^5

or 131932.98

Something seems a little funky, because it actually lost a few thousand more when compounding once a year than when compounding continually....but the formulas should be correct.

final value= P(1+r)^n

or 250,000(1+-.12)^5

or 131932.98

Something seems a little funky, because it actually lost a few thousand more when compounding once a year than when compounding continually....but the formulas should be correct.

#8

maybe you're right. i always thought that PeRT was for "depositing money and gaining interest" problems. that answer seems a little low though, don't you think? then again, i'm not sure.

#9

gaining interest=compounding.

I'm not certain I'm right, but I know those are equations for compounding interest.

The numbers do seem low, perhaps you could call a classmate and ask them what they've gotten for it? Usually, you use PeRT and the other one for positive interest, not negative.

I'm not certain I'm right, but I know those are equations for compounding interest.

The numbers do seem low, perhaps you could call a classmate and ask them what they've gotten for it? Usually, you use PeRT and the other one for positive interest, not negative.