Question

A new motorboat costs $6000. The value of the boat decreases by 15% each year. What is the value of the boat after 3 years?

Answer 1

The value of the boat after 3 years is
`\$3,684.75`

Explanation:

we know that

The formula to calculate the depreciated value is equal to

`V=P(1-r)^(x)`

where

V is the depreciated value

P is the original value

r is the rate of depreciation in decimal

x is Number of Time Periods

in this problem we have

`P=\$6,000\\r=15\%=15/100=0.15\\x=3\ years`

substitute

`V=6,000(1-0.15)^(3)`

`V=6,000(0.85)^(3)`

`V=\$3,684.75`