Question

a car sells for $16,000. if rate depreciation is 18%, find the value of the car after 8 years.round to the nearest penny

Answer 1

The value of the car depreciates by 18% every year, so every year, 82% (100% - 18%) of the value of the car is left.

After one year, the value of the car is $16,000(0.82)
After two years, the value of the car from last year is multiplied again by 0.82: $16,000(0.82)(0.82)
After three years: $16,000(0.82)(0.82)(0.82), or $16,000(0.82)^3

After n years: $16,000(0.82)^n

After 8 years, the value of the car is $16,000(0.82)^8 = $3270.63