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The price of a computer component is decreasing at a rule of 14% per year. State whether this decrease is linear or exponenti
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Answer #1

We know that Linear functions change at a constant rate per unit interval whereas an exponential function changes by a common ratio over equal intervals.

Here, the price is changing by a common ratio. Hence the decline in price is exponential.

The price of a computer component is decreasing at the rate of 14 % per year. The price of the component after 1 year will be $ 0.86*120 , after 2 years, it will be $ 0.86*(0.86*120) = $ (0.86)2 *120 and after 3 years, it will be $ (0.86)*(0.86)2 *120 = $ (0.86)3 * 120 = $ 76.33 ( on rounding off to the nearest cent).

Thus, after 3 years, the price of the component will be $ 76.33.

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