Question

A motor cycle purchased for $9,000 today will be worth 6% less each year. For what can you expect to sell the motorcycle at the end of 5years

Answer 1

$5,956.2

Explanation:

First we need to find the amount after 5years using the formula

A =P(1+r)^n

A = 9000(1+0.06)^5

A = 9000(1.06)^5

A = 9000(1.3382)

A = 12,043.8

Interest after 5 years = 12,043.8 - 9000

Interest after 5 years = 3,043.8

Since it will be worth 6% less each year, the amount after 5years will be 9000 - 3,043.8 = $5,956.2