New cars purchased for $20,300 the value of the car depreciate at 8.75% per year what will the value of the car be to the nearest cent after 12 years

Question

asked May 10, 2020 187k views

2 Answers

Rosa Gronchi · Answer 1 · 2020-05-16T14:12:03+0000

Answer: $6765.35 or $6765 and 35 cents .

Explanation:

Given : New cars purchased for $20,300 the value of the car depreciate at 8.75% per year.

i.e. Initial value :
$A_0= \$20,300$

Rate of depreciation : r= 8.75% =0.0875

Time : t= 12 years

Formula :
A=A_0(1-r)^(t) , where A is the value of car after t years.

Substitute the corresponding values , we get

$A=\$20300(1-0.0875)^(12)$

$A=\$20300(0.9125)^(12)$

$A=\$20300(0.333268661729)$

$A=\$6765.35383309\approx\$6765.35$ [Rounded to the nearest cent]

Hence, the value of the car after 12 years will be $6765.35 .