When a new cell phone is released, older generations of the same phone type typically decrease in sale
value by approximately 20% from its current price prior to the new phone's release.
Generally, a new generation is released each year. What type of relationship should be expected between the age of a phone and its sale value?
Approach
Each year, a cell phone's sale price will decrease by 20%, which is the same as becoming 80% of its current value. Take this sample case:
$$ \$500 \tag*{\tiny first generation phone (new)}$$
$$ \$500\cdot(0.80) \tag*{\tiny new phone released} $$
$$ \$500 \cdot(0.80)(0.80) \tag*{\tiny another new phone released} $$
$$ \$500(0.80)^t \tag*{\tiny after t new phones released}$$
An equation with this form signifies exponential decay.