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28 May, 17:07

A new car sells for $25,000. The value of the car decreases by 15% each year. What is the approximate value of the car 5 years after it is purchased?

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  1. 28 May, 18:55
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    The answer is $11,092.63.

    This could be calculated using the proportion. If the value of the car decreases by 15% each year, that means that after each year the value of the car is 85% of the value from the first year.

    After 1st year:

    $25,000 : 100% = x1 : 85%

    x1 = $25,000 · 85% : 100%

    x1 = $21,250

    After 2nd year:

    $21,250 : 100% = x2 : 85%

    x2 = $21,250 · 85% : 100%

    x2 = $18,062.5

    After 3rd year:

    $18,062.5 : 100% = x3 : 85%

    x3 = $18,062.5 · 85% : 100%

    x3 = $15,353.12

    After 4th year:

    $15,353.12 : 100% = x4 : 85%

    x4 = $15,353.12 · 85% : 100%

    x4 = $13,050.15

    After 5th year:

    $13,050.15 : 100% = x5 : 85%

    x5 = $13,050.15 · 85% : 100%

    x5 = $11,092.63

    Therefore, the value of the car 5 years after it is purchased is $11,092.63.
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