Question

A new car is purchased for 16400 dollars. The value of the car depreciates at 12.5% per year. What will the value of the car be, to the nearest cent, after 8 years?

Answer 1

Answer: 5635.19 dollars (approx)

Explanation:

Since, the initial value of car is 16400 dollars,

And, it is decreasing per year by the rate of 12.5%

Thus, the new price of car after x years,

`f(x) = 16400(1-(12.5)/(100) )^x`

`f(x) = 16400(1-0.125 )^x`

`f(x) = 16400(0.875 )^x`

For x = 8 years,

`f(8) = 16400(0.875 )^8`

`f(8) = 16400* 0.343608915806`

`f(8) = 5635.18621922\approx 5635.19`

Therefore, the price of car after 8 years is 5635.19 dollars(approx)