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2-34.

Below are two situations that can be described using exponential functions. They represent a small sample of the situations where quantities grow or decay by a constant percentage over equal periods of time. For each situation: Homework Help ✎

• What is an appropriate unit of time (such as days, weeks, years)?

• What is the multiplier?

• What is the initial value?

• Write an exponential equation in the form $f(x)=ab^x$ that represents the situation.

1. The value of a car with an initial purchase price of $\12,250$ depreciates by $11\%$ per year.

If the value of the car decreases by $11\%$ every year, then the car is worth $89\%$ of the cost of it during the previous year.

Years; $0.89$; $12,250$

$f(x)=12250(0.89)^{x}$

2. An investment of $\1000$ earns $6\%$ annual interest, compounded monthly.

Use a similar process as in part (a) above.