Question

What is the value, after 7 years, of a Ford Mustang that originally costs $25000.00 if it depreciates at a rate of 8% per year? Round your answer to the nearest dollar.

Answer 1

the rounded answer would be : 14000

Answer 2

$13,946

Explanation:

Each year, the value is multiplied by 1 - 8% = 0.92. An exponent is used to signify repeated multiplication, so after 7 years, the value is ...

$25,000 × 0.92^7 ≈ $25,000 × 0.5578466 ≈ $13,946