Understanding Depreciation and Exponential Decay

What is depreciation?

• A reduction in the value of an item over time due to wear and tear

• A process to enhance the quality of a product

• An increase in the value of an item over time

• A method to calculate interest on savings

Which formula is used to model depreciation?

• Simple interest formula

• Linear growth formula

• Quadratic equation

• Exponential decay formula

In the example, what is the initial value of the car?

• $20,000

• $25,000

• $30,000

• $35,000

How do you convert a percentage to a decimal for the decay rate?

• Add 100

• Divide by 100

• Divide by 10

• Multiply by 100

What is the annual depreciation rate of the DSLR camera in the practice problem?

• 18%

• 10%

• 15%

• 12%