The price of a computer component is decreasing at a rate of 12% per year. State weather this decrease is linear or exponential. If the component cost 90$ today, what will it cost in three years?
The price of a computer component is decreasing at a rate of 12% per year. State weather this decrease is linear or exponential. If the component cost 90$ today, what will it cost in three years?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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The price of a computer component is decreasing at a rate of 12% per year. State weather this decrease is linear or exponential. If the component cost 90$ today, what will it cost in three years?
Expert Solution
Step 1
The decline in price would be exponential, due to the fact that the decrease in price is not always the same, since it
changes every year.
After n years, the price of a computer component is
Where A = Rate of computer component after n years
P= Present rate of computer component
r = Rate of change in price (for decreasing before r use - and for increasing before r use + )
n = time period.
The above formula is just look like as of the form , hence the decreasing rate is exponential.
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