7
QuizMultiple Choice

Exponential Depreciation — Quiz

Question 7 • Advanced Financial Algebra

A small business buys office equipment for $2,500 It depreciates at a rate of 18% per year. Calculate its value after 6 years using the exponential depreciation formula: y=A⁢(1−r)^x

Answer
A
926 point 8 5 dollars
B
760 point 0 2 dollars
C
1 dollars comma 130 point 3 0
D
1 dollars comma 681 point 0 0

Explanation

Use the depreciation formula with the starting value A = $2,500, rate r = 0.18, and time x = 6: y = 2,500(1 − 0.18)^6 = 2,500(0.82)^6. This is approximately $760.02, so the value after 6 years is $760.02, choice C.

AI-written and checked against the verified answer.

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