Computing Depreciation: Analyzing a Model

This video tutorial covers the concepts of exponential growth and decay, focusing on depreciation. It explains how exponential functions work, provides examples of investment growth and depreciation, and derives a general formula for calculating depreciation. The tutorial also compares depreciation with compound interest and includes practical examples, such as car and bike depreciation calculations.

What is the characteristic of an exponential growth function?

• The base is equal to 1

• The base is a negative number

• The base is less than 1

• The base is greater than 1

If you invest $500 at an annual growth rate of 27%, what will be the value after 5 years?

• $1,652

• $2,000

• $1,200

• $1,000

What is a common misunderstanding about depreciation?

• It means the asset loses a percentage of its value

• It means the asset loses all its value

• It means the asset is worth 0

• It increases the value of an asset

How much is a car worth after 1 year if it depreciates by 12% annually from an initial value of $20,000?

• $19,000

• $17,600

• $18,000

• $16,000

What is the base of the exponent in a depreciation function?

• A negative number

• Less than 1

• Equal to 1

• Greater than 1

How does the graph of a depreciation function behave over time?

• It increases rapidly

• It decreases slowly and then rises

• It remains constant

• It decreases rapidly and then flattens out

What is the main difference between depreciation and compound interest?

• Both add value

• Depreciation subtracts value, compound interest adds

• Depreciation adds value, compound interest subtracts

• Both subtract value