Question

Doug bought a new car for $25,000. He estimates his car will depreciate, or lose value, at a rate of 20% per year. The value of his car is modeled by the equation V = P(1 – r)t, where V is the value of the car, P is the price he paid, r is the annual rate of depreciation, and t is the number of years he has owned the car. According to the model, what will be the approximate value of his car after mc013-1.jpg years?

$2,500
$9,159
$22,827
$23,802

Answer 1

The equation should be v = p(1-r)^t

then v = 25000(1-0.20)^4.5

v = 9,159

Answer 2

The answer is : $9,159

Explanation:

Doug bought a new car for $25,000. He estimates his car will depreciate, or lose value, at a rate of 20% per year.

Given equation is:

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

P = $25000

r = 20% or 0.20

t = 4.5 years

So, equation becomes:

`25000(1-0.20)^(4.5)`

=
`25000(0.80)^(4.5)`

= $9159

Therefore, the approximate value of the car will be $9159.