Question

The price of a computer component is decreasing at a rate of ​10% per year. State whether this decrease is linear or exponential. If the component costs ​$ 110 today, what will it cost in three​ years?

Answer 1

The cost in 3 years is $80.19.

Explanation:

The cost of computer component is $110 today.

The cost is decreasing at a rate of 10% per year.

When it decreases by 10% per year then it is exponential.

Initial cost is $110. When it decreases 10% per year, the decay factor is 1-0.10 =0.90.

So, we could use the exponential formula y=
`ab^(x)`

Where 'a' is initial cost and b is decay factor.

Our equation would by plug in 'a' as 110 and 'b' as 0.90.

We get

`y= 110(0.9)^(x)`

Now, to find the cost in 3 years, use x as 3.

`y=110(0.9)^(3)`

Which is simplified to

y=$80.19