Answer:
p₁ = 0.98 p₀
p₂ = 0.98 p₁
Step-by-step explanation:
Given - N 2008 price of houses were declining by 2% each year.
If a house was purchased for $195,000.
To find - Write the equation that models the situation.
Proof -
Let us assume that
p₀ = initial price of house
p₁ = price of house after 1 year
p₂ = price of house after 2 years
Now,
Given that, p₀ = $195,000
Then,
p₁ = p₀ - 2% p₀
= p₀( 1 - 2%)
= p₀ ( 98%)
⇒p₁ = 98% p₀
⇒p₁ = [tex]\frac{98}{100}[/tex] p₀
⇒p₁ = 0.98 p₀
Now,
Also p₂ = p₁ - 2% p₁
By doing the same process as above, we get
p₂ = 0.98 p₁
