A new car that sells for $18.000 depreciates at a rate of 25% per year. Find the value of the car after 4 years ?

Question

A new car that sells for $18.000 depreciates at a rate of 25% per year. Find the value of the car after 4 years ?

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Amara 2 weeks 2021-10-04T16:27:00+00:00 1 Answer 0

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    2021-10-04T16:28:15+00:00

    Answer:

    After 4 years, the value of the car would be of $5695.31.

    Step-by-step explanation:

    The formula for compound interest works perfectly in this case:

    a = p {(1 +  \frac{r}{n} )}^{nt}

    As in this case the repetitions per annum are just 1 (yearly), we can ignore the n.

    Replacing variables with our values, a yields the depreciated value:

    a = 18000 {(1 - 0.25)}^{4}  \\ a = 18000 {(0.75)}^{4}  \\ a = 18000(0.31640625) \\ a = 5,695.3125 = 5695.31

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