Question

Suppose the value of a car depreciates 8% every year. To the nearest dollar, what will a car that cost $23,995 be worth after 5 years? (Remember, the formula is A = P(1 + r)t.)

Answer 1

Answer:

The car will worth $15815 after 5 years.

Step-by-step explanation:

The formula is:    $A=P(1+r)^t$, where P = Initial cost, A = Final cost,  r = Rate of change in cost per year and  t = Number of years.

Here, $P= 23995, t= 5$

and $r= 8\%=0.08$

As here the value of the car depreciates every year, so we need to plug the value of $r$ as negative. So, $r=-0.08$

Now plugging the above values into the formula, we will get.....

$A=23995(1-0.08)^5\\ \\ A=23995(0.92)^5\\ \\ A=15814.6611... \approx 15815$

(Rounded to the nearest dollar)

So, the car will worth $15815 after 5 years.