1. A certain stock started at $55 per share, it is losing 12% of its value every week. Complete the following:

Question

1. A certain stock started at $55 per share, it is losing 12% of its value every week. Complete the following:

a). Fill out the table:

Week Value

1

2

3

4

b). Write an equation that models the value V(x) where x = 1 is the first week the value decreased.

Answer 1

This is an exponential (decay) function much like depreciation of an asset like a car or the half-life of a radioactive element. In this case, the stock's value is 100% - 12% = 88% of its value in the previous week.

The general form of the decay function is y = a(1- r)^t where y is the remaining value after t weeks, a is the initial value ($55), r is the weekly pct. loss (as a decimal) and t is the no. of weeks.

Hope this helps.