Question

the original purchase price of a car is $14,000. Each year, its value depreciates by 10%. three years later after its purchase, what is the value of the car?

Answer 1

A=p (1-r)^t
A=14,000×(1−0.10)^(3)
A=10,206

Answer 2

The value of the car is $18634.

Explanation:

Given : The original purchase price of a car is $14,000. Each year, its value depreciates by 10%. Three years later after its purchase.

To find : What is the value of the car?

Solution :

To find the value of car we apply compound interest formula,

`A=P(1+r)^t`

Where, A is the amount

P is the principal P=$14000

r is the rate of depreciates r=10%=0.1

t is the time t=3 years

Substitute the value in the formula,

`A=14000(1+0.1)^3`

`A=14000(1.1)^3`

`A=14000* 1.331`

`A=18634`

Therefore, The value of the car is $18634.