Alex purchased a new car for 28,000. The cars value depreciates 7.25% each year. What will be value of the car 5 years after it is purchased? Round your answer to the newest dollar

Question

Mathematics

Salazar

2 November, 20:55

Alex purchased a new car for 28,000. The cars value depreciates 7.25% each year. What will be value of the car 5 years after it is purchased? Round your answer to the newest dollar

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Answers (1)

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Blondie · Answer 1

If depreciation is 7.25% per year, then the common factor is (1-0.0725), or 0.9275.

Thus, the car's value after 5 years will be:

V = $28000 (0.9275) ^5 = $28000 (0.6864) = $19218.86, or (to the nearest dollar) $19218 (answer)