Question

The formula for depreciation is V=P(1-r)t where P is the beginning price of the asset, r is the annual rate of depreciation written as a decimal, t is the number of years, and V is the value after t years. Jada's car depreciates at 12% each year. She bought the car for $24,700. What is the value of her car after 5 years?

Answer 1

Answer:

The value of the car after 5 years is $ 13,035 to the nearest dollar.

Step-by-step explanation:

The formula for depreciation is

$V=P(1-r)^t$

where $P=24,700\:dollars$ is the beginning price of the asset,

$r=12\%$ is the annual rate of depreciation written as a decimal,

$r=0.12$

$t=5$ is the number of years, and V is the value after t years.

Now substitute all these values into the formula to get,

$V=24,700(1-0.12)^5$

This  simplifies to,

$V=24,700(0.88)^5$

$\Rightarrow V=24,700(0.5277319168)$

$\Rightarrow V=13,034.97834$

The value of the car after 5 years is $ 13,035 to the nearest dollar.