Question

Bailey buys a car for $25,000. The car depreciates in value 18% per year. How much will the car be worth after 3 years? Round your answer to the nearest whole dollar amount.

Answer 1

To find out how much the car will be worth after 3 years, we need to calculate the depreciation for each year and subtract it from the original price.

After one year, the car will be worth:

W1 = 25000 - 0.18*25000 = 20500

After two years, the car will be worth:

W2 = 20500 - 0.18*20500 = 16810

After three years, the car will be worth:

W3 = 16810 - 0.18*16810 = 13796.8 ≈ 13797

Rounding this to the nearest whole dollar amount, we get:

W3 ≈ $13,797

Therefore, the car will be worth approximately $13,797 after 3 years.