Question

Alex purchased a new car for $28,000. The car's value depreciates 7.25% each year. What will be the value of the car 5 years after it is purchased? Round your answer to the nearest dollar.

Answer 1

The value would be 28,000*(1-0.0725)*(1-0.0725)*(1-0.0725)*(1-0.0725)*(1-0.0725)
which is 28,000*0,9275$^{5}$
which equals 28,000*0.6863=$19,219