Question

The value of a car purchased for $20,000 decreases at a rate of 12% per year. What will be the value of the car after 3 years?

Answer 1

$13,629.44

Explanation:

Value of car after 3 years is:

V = $20,000(1.00-0.12)^3, or

$20,000(0.88)^3 = $13,629.44