Question

When Mike graduated college, his dad bought him a new truck worth $22,000. One year later, the truck had dropped 15% in value. If the truck's value continued to drop by 15% each year, what is the trucks value after 3 years? Round your answer to the nearest dollar.

When Mike graduated college, his dad bought him a new truck worth $22,000. One year later, the truck had dropped 15% in value. If the truck's value continued to drop by 15% each year, what is the trucks value after 3 years? Round your answer to the nearest dollar.

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Answer 1

If the truck's value dropped 15% each year, after one year the value of the truck is 22000*(1-0.15) = $18700

After the second year, the value of the truck would be 18700*(1-0.15) = $15995

After the third year, the value of the truck would be 15995*(1-0.15) = $13596.75

Rounding the answer to the nearest dollar, the value of the truck after 3 years is $13597