Question

A vehicle purchased for $27,500 depreciates at a constant rate of 5%. Determine the approximate

value of the vehicle 10 years after purchase. Round to the nearest whole dollar.

Answer 1

$16,464

Explanation:

A=P(1-r)^t

Where

P=$27,500

r=5%=0.05

t=10 years

A=P(1-r)^t

=27500(1-0.05)^10

=27,500(0.95)^10

=27,500(0.5987)

=16,464.25

To the nearest whole dollar=$16,464