Question

A new car is purchased for 20300 dollars. The value of the car depreciates at 8.75% per year. What will the value of the car be, to the nearest cent, after 12 years?

Answer 1

$6,765.35.

Explanation:

Here we have to use the rate of depreciation, the initial value and the total time to find the final value with this formula

`A=A_(0)(1-r)^(t)`

Where
`A` is the final value,
`A_(0)` is the initial value,
`r` is the rate of depreciation and
`t` is the time.

Replacing all values, we have

`A=20300(1-0.0875)^(12)`

`A=6765.35`

Therefore, after 12 years the car will value $6,765.35.