Question

Alex purchased a new car for $28000. The car depreciates 7.25% each year. what will the price be in 5 years?

Answer 1

Use the depreciation formula.

$\sf p(1-r)^n$

Where 'p' is the principal value, 'r' is the rate it depreciates, and 'n' is the time. Just plug in what we know:

$\sf 28000(1-0.0725)^5$

Simplify by subtracting:

$\sf 28000(0.9275)^5$

Simplify the exponent:

$\sf 28000(0.6864)$

Multiply:

$\sf\approx\boxed{\sf\ 19219.20}$