Problem
Question 2 Determine whether the growth (or decay) is linear or exponential, and answer the associated question. The price of computer memory is decreasing at a rate of \( 10 \% \) per year. If a memory chip costs \( \$ 79 \) today, what will it cost in two years? Exponential; \( \$ 71.30 \) Linear; \( \$ 94.80 \) Linear; \( \$ 63.20 \) Exponential; \( \$ 63.99 \)
Solution
Step 1 ：1. Exponential decay formula: \( P(t) = P_0(1 - r)^t \)
Step 2 ：2. Substitute given values: \( P(2) = 79(1 - 0.10)^2 \)
Step 3 ：3. Calculate the price: \( P(2) = 79(0.9)^2 \approx \$ 63.99 \)
