Question

A new car is sold for its sticker value of $19,400. Three years later, the customer returns to the car dealership to trade the car in. She is told that her car now has a value of $12,105. What is the rate of decline in the value of the car? In your final answer, include all of your calculations.
Use the formula ​A=P(1-r)^t

Answer 1

A = $12105; P = $19400; t = 3 (yrs)

Then $12105 = $19400(1-r)^3, or

            0.6240 = (1-r)^3

Take the cube root of both sides.  Then   0.854 = 1 - r, or r = 1 - 0.854 = 0.145 (answer)            0.145 is a decimal fraction.