Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?

 Every year, Vehicle 1 depreciates $3000  Every year, Vehicle 2 depreciates 15% Years (n)Vehicle 1Vehicle 2 0$ $22 000$ $19 000$ $16 000$ Which vehicle is a better deal when it comes to depreciation?

Vehicle 2 depreciates less in the long run! Stunning result…

 Edgar has $500 to invest and is considering two investment options. Option A: A treasury bond that pays 8% simple interest. The amount, A, after n years is given by the equation A = n. Option B: A savings account that pays 6.5% per year, compounded annually. The amount, A, after n years is given by the equation A = 500(1.065) n. Which is a better investment? Why?

 Option A: A = n  Option B: A = 500(1.065) n

 Option A ahead at the start  Option B catches up and surpasses A  Also, notice that Option A is linear, but Option B is exponential.

LINEAR

EXPONENTIAL