A building worth $100,000 loses 5% of its value annually. Which equation models its depreciation over time x years??

A 5% annual loss means the building retains 100% − 5% = 95% of its value each year, or a factor of 1 − 0.05 = 0.95. After x years, its value is y = 100,000(0.95)^x. Choice C, y = 100,000(1 − 0.05)^x, models this repeated percentage decrease.

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