How long will it take for 1000 to decay to 500 with a loss of 3% a year (approximate historical inflation)?

Intermediate Algebra
10th Edition
ISBN:9781285195728
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter11: Exponential And Logarithmic Functions
Section11.CR: Review Problem Set
Problem 56CR
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How long will it take for 1000 to decay to 500 with a loss of 3% a year (approximate historical inflation)?






Expert Solution
Step 1

Given :

Initial value = 1000

Final value = 500

Loss is 3% per year

Apply the exponential decay formula

Algebra homework question answer, step 1, image 1

Where ‘a’ is the initial value and y is the final value

X is the number of years and ‘r’ is the rate of loss

Step 2

Substitute the given values , a=1000, y=500 and r=0.03

Algebra homework question answer, step 2, image 1

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