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A boat has a depreciation rate of 12% per year. If the original price of the boat was $15,000, what is the value of the boat 5 years later? Round your answer to the nearest penny (hundredths place value). ​

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Answer: $7,915.98

Step-by-step explanation: This is an exponentially decaying problem, so that means we use the formula ab^x.

The a value is the original price or the starting point, which is 15,000. The b value is the ratio in which it decreases or increases. It is decreasing, so we subtract 12 from 100, which is 88. The ratio should be in decimal form, so it is 0.88. Finally, the x should be the exponent, the amount of times it is getting multiplied by the ratio. So the equation would be 15,000(0.88)^5.

Then, we solve.

0.88 * 0.88 * 0.88 * 0.88 * 0.88 = 0.5277319168

Then 0.5277319168 * 15,000 = 7,915.978752.

Of course, we round to the nearest hundredth, which is 7,915.98. Hope this helped.

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