Question

In the year 2003, a person bought a new car for $17500. For each consecutive year after that, the value of the car depreciated by 11%. How much would the car be worth in the year 2006, to the nearest hundred dollars?

Answer 1

Answer:

$12320

Step-by-step explanation:

Given data

Cost of car= $17500

rate of depreciation= 11%

duration= 2003 - 2006= 3 years

Let us apply the compound interest formula

A= P(1-r)^t

Note the negative sign(this is because of the depreciation)

A=17500(1-0.11)^3

A= 17500(0.89)^3

A=  17500*0.704

A= $12320

Hence the value of the car is $12320