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

  • Find an appropriate unit of time (such as days, weeks, years).

  • Find the multiplier that should be used.

  • Identify the initial value.

  • Write an exponential equation in the form that represents the growth or decay.

  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

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

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