Question

If a $32,500 car loses 15% of its value each year, what will it be worth x many years from now?

Answer 1

I think the worth goes down 4,875$ a year

Answer 2

Step-by-step explanation:

This question is an example of compound decrease.

To work this out you would first have to convert the percentage of 15% into a decimal. You can achieve this by dividing the percentage of 15 by 100, which gives you 0.15. You would divide by one hundred as percentages are out of 100.

The next step is to minus 0.15 from 1, which gives you 0.85. This is because you are finding the percentage decrease from the amount.

Then you would multiply the amount of 32500 by 0.85 to the power of x. x as in the number of years. This is because you are finding the percentage decrease and then the next year you would find the decrease of the new amount, and so by multiplying the amount by the decimal to the power of x you are essentially repeating that step for how many years the question requires.

1) Divide 15 by 100.

$15/100=0.15$

2) Minus 0.15 from `1.

$1-0.15=0.85$

3) Multiply 32500 by 0.85 to the power of x.

$32500*0.85^{x}$