Question

At the beginning of 2000 Bradley's house was worth 220 thousand dollars and Spencer's house was worth 114 thousand dollars. At the beginning of 2003, Bradley's house was worth 188 thousand dollars and Spencer's house was worth 156 thousand dollars. Assume that the values of both houses vary at an exponential rate.

Answer 1

- Bradley has an exponential depreciation of 10.67 thousand per year.

- Spencer had an exponential increase of 14000 per year.

Explanation:

At the beginning of 2000:

Bradley, B = 220000

Spencer, S = 114000

At the beginning of 2003:

Bradley, B = 188000

Spencer, S = 156000

Variation for the 3 years:

Bradley, B = 188000 - 220000

= -32000

Spencer, S = 156000 - 114000

= 42000

For 1 year:

Bradley, B = 32000 ÷ 3

≈ An exponential depreciation of 10.67 thousand per year

Spencer, S = 42000 ÷ 3

= An exponential increase of 14000 per year.