The decay factor here is 0.85, and it means the car’s value changes by 85% every year, or goes down by 15% every year.
The formula for exponential decay is y = a(1 - b)^x
y is the final amount.
a is the initial amount, which is $30,000 in this case.
(1 - b) is the decay factor, or the number the original value gets multiplied by each year, which is 0.85 here.
b is the percent decrease in decimal form. In this case, we can find it using the formula (1 - b) = 0.85. We soon find that b = 0.15, or 15%.
x is the number of years.
