Question

The value of a dirt bike decreases by 15% each year. If you purchased this dirt bike today for $500, to the nearest dollar how much would the bike be worth 5 years later?

Answer 1

The answer is 222

All you do is multiply 500 by 0.15, which gives you 75. Then subtract that from 500 to give you 425. Now multiply this 425 by 0.15 then subtract the product form 425. Continue this process until it is done 5 times. Your answer on the fifth time will be your answer.

Answer 2

Right now the dirt bike is worth $500. Next year it will be worth 15% less, or 85% of the current value (because currently it's at 100%, so you would subtract the 15%). To find 85% of the dirt bike's value, you would take $500 and multiply by 85% (or 0.85). This would give you $425 after 1 year. You'd take $425 and multiply that by 85% for the next year, and continue until you reached 5 years of the value decreasing. Does this help?