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22 June, 09:22

A new car is purchased for 24600 dollars. The value of the car depreciates at 13.75% per year. What will the value of the car be, to the nearest cent, after 15 years?

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  1. 22 June, 09:38
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    The value will be $1,411.20

    Step-by-step explanation:

    What we do here is to set up an exponential equation to calculate the value.

    Mathematically it will look like this;

    V = I (1-r) ^n

    where V is the future value

    I is the initial amount = 24,600

    r is rate of decrease = 13.75% = 13.75/100 = 0.1375

    n is the number of years = 15 years

    substituting these values, we have

    V = 24,600 (1-0.1375) ^15

    V = 24600 (0.8625) ^15

    V = 1,411.165582454129

    = $1,411.20
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