The point is to find the growth rate. The compound formula is:
P=A(1+ growth rate)ⁿ, where A is the initial Value & P the new value after n years: P₂₀₀₃ =P₂₀₀₂ (1+ growth rate)¹ (the period "n" from 2002 to 2003 being 1 year)
38400 = 32000(1+growth rate)¹ 38400 / 32000 - 1= growth rate & growth rate = 1/5 = 0.2 You will balso find the same growth rate for: P₂₀₀₄ = P₂₀₀₃(1+ growth rate)¹ P₂₀₀₅ = P₂₀₀₄((1+ growth rate)¹ between 2015 & 2002 THERE ARE 14 YEARS:
A reduction of 15% per year means 100-15=85% reducing factor. 1st year: 0.85×18000=$15300. 2nd year: 0.85×15300=$13005. 3rd year: 0.85×13005=$11054.25. So after 3 years the value of the car is $11054.25 or $11054 to the nearest dollar.
