Question

3. The yearly profits of a company is $5,000. The profits have been decreasing by 6% per year.

a). Write an exponential decay function to represent this situation.

b). What will be the profits in 8 years? Round your answer to the nearest dollar.

10 Points question

Answer 1

5000 X (0.96)^n

$3607

Explanation:

Profit decreases at a rate of 6% per year = 100 - 6 = 96%

In year 1, profit would be = 5000 x 0.96 = 4800

In year 2 = 5000 x 0.96^2 =

5000 X (0.96)^n

5000 X (0.96)^8 = $3607