Question

Misty purchased a car several years ago for 21,459. The value of the car depreciated at a rate of 15% annually. What was the value of the car after 5 years? Round your answer to the nearest whole dollar.

Answer 1

Answer: $‭9,521

Explanation:

In such cases, you should use the future value formula which is:

Future value = Amount * (1 + rate) ^ number of periods

Rate = -15% because the value is decreasing.

Future value = 21,459 * (1 -15%)⁵

= $‭9,521

Car will be valued at $9,521 after 5 years.