Question

The value of a house decreases at a steady rate of 20% each year. What is the total percentage loss (to the nearest integer) in value of the house at the end of 5 years.

Answer 1

Answer: The total percentage loss would be 67%.

Step-by-step explanation:

Since we have given that

Rate of decline each year = 20%

Number of years = 5

We need to find the total percentage loss in value of the house at the end of 5 years.

So, Total percentage loss would be

$1-(1-\dfrac{r}{100})^5\\\\=1-(1-\dfrac{20}{100})^5\\\\=1-(\dfrac{4}{5})^5\\\\=1-(0.8)^5\\\\=0.67\\\\\approx 67%$

Hence, the total percentage loss would be 67%.