The price of a rare collection car has increased exponentially

over the past few years with a rate of increase estimated at 5% per year.

At the start of 2015 the value of the car was estimated at £265000.

Estimate the value of the car at the start of 2010.

Round your answer to 3 significant figures.

Question

Mathematics

Kai Oliver

11 July, 04:14

The price of a rare collection car has increased exponentially

over the past few years with a rate of increase estimated at 5% per year.

At the start of 2015 the value of the car was estimated at £265000.

Estimate the value of the car at the start of 2010.

Round your answer to 3 significant figures.

+1

Answers (1)

Know the Answer?

Keyla · Answer 1

Answer: £208,000

Step-by-step explanation:

Hi, to answer this question we have to apply an exponential growth function:

A = P (1 + r) t

Where:

p = original price

r = increase rate (decimal form)

t = years (2015-2010 = 5 years)

A = price after t years

Replacing with the values given:

265,000 = p (1 + 0.05) ^5

Solving for p

265,000 = p (1.05) ^5

265,000 = p (1.05) ^5

265,000 / (1.05) ^5 = p

p = £207,634. = 208,000 (rounded)

Feel free to ask for more if needed or if you did not understand something.

The price of a rare collection car has increased exponentiallyover the past few years with a rate of increase estimated at 5% per year.At the start of 2015 the value of the car was estimated at £265000.Estimate the value of the car at the start of 2010.Round your answer to 3 significant figures.