SOLUTION: If a Honda Prelude bought in 2000 cost $32000 and depreciates at a rate of 20% per year, and a Chevrolet Corvette bought in 1994 cost $43000 and depreciates at a rate of 15% per ye

Algebra ->  Quadratic Equations and Parabolas -> SOLUTION: If a Honda Prelude bought in 2000 cost $32000 and depreciates at a rate of 20% per year, and a Chevrolet Corvette bought in 1994 cost $43000 and depreciates at a rate of 15% per ye      Log On


   

Question 122005: If a Honda Prelude bought in 2000 cost $32000 and depreciates at a rate of 20% per year, and a Chevrolet Corvette bought in 1994 cost $43000 and depreciates at a rate of 15% per year, algebraically determine which car is worth more in 2005.
Answer by Fombitz(32388) About Me  (Show Source):
You can put this solution on YOUR website!
The Honda depreciation function, H,is
H%28T%29=32000%281-0.20%29%5E%28T-2000%29
The value of H for 2005 is,
H%282005%29=32000%280.80%29%5E%282005-2000%29
H%282005%29=32000%280.80%29%5E%285%29
H%282005%29=32000%280.32768%29
H%282005%29=10485.76
The Corvette depreciation function, C,is
C%28T%29=43000%281-0.15%29%5E%28T-1994%29
The value of C for 2005 is,
C%282005%29=43000%280.85%29%5E%282005-1994%29
C%282005%29=43000%280.85%29%5E%2811%29
C%282005%29=43000%280.16734%29
C%282005%29=7195.76
The Honda is worth $10,485.76 while the Corvette is worth $7195.76.
The Honda is worth $3290.00 more than the Corvette.