Question

A car worth $12,000 decreases in value by 7 percent every year. After five years, it is worth $8,976.

Answer 1

I do not think that is the right answer.
But, this might be,

12,000 x 0.07 = 840.

 840 x 5(the years) = 4,200.

12,000 - 4,200 = 7,800.