Exponential Decay) 4\ The value of a car declines exponentially at 7.5% per year. Find the original value of the car if its value when it was 4 years old was OMR 14816.36. Use this formula: P = Pe(-r.t)

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Exponential Decay)

4\ The value of a car declines exponentially at 7.5% per year. Find the original value of the car if its value when it was 4 years old was OMR 14816.36.

 

Use this formula:  P = Pe(-r.t)

 
Expert Solution
Step 1

Given:

Interest rate = 7.5%

Years = 4

Future value = OMR 14,816.36

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