Trust fund questions

Question

I'm having trouble figuring out how to calculate trust funds. For example, I can't figure out this question

Using a starting value of $3 trillion in the trust funds in 2032, with an annual rate of decline of 8.7%, how much money will be in the funds in 2040?

Answer 1

With decay problems the general form is

X₀(1-r)^t

Where x₀ is a starting amount

r is rate as a decimal

t is time

In this problem

X₀ = 3 trillion

r = .087

t = 2040-2032=8

Substitute all the values in the equation

(3 trillion)(1-.087)⁸

(3 trillion)(.913)⁸

(3 trillion)(.4827988426)

1.45 trillion