Question

A car is purchased for $24,000. After each year, the resale value decreases by 20%. What will the resale value be after 5 years?

Answer 1

After 5 years the value of car will be: $7864

Step-by-step explanation:

Original Price = $24,000

Decrease in value = 20%

Resale value after 5 years = ?

The formula used will be:

$Resale\,\,value=Original\,\,price(1-\%\, decrease)^n$

Where n = no of years

and % decrease would be in decimal

So, 20% = 0.2

Putting values and finding resale value:

$Resale\,\,value=Original\,\,price(1-\%\, decrease)^n\\Resale\,\,value=24000(1-0.2)^5\\Resale\,\,value=24000(0.8)^5\\Resale\,\,value=24000(0.32768)\\Resale\,\,value=7864.32$

So, after 5 years the value of car will be: $7864

Keywords: Percent decrease

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