Question

You are buying a used car which costs $10,200. You plan to sell the car after keeping it for 5 years. Research shows that this car will lose value at a rate of 8% per year. How much will the car be worth after 5 years?

Answer 1

$6,722.63

Explanation:

Using this formula A=P(1-d/100)^n where

A = Amount

P = Principal

d = percent

n = number of year

A=P(1-d/100)^n

A = 10,200(1-8/100)⁵

A = 10,200(1-0.08)⁵

A = 10,200(0.92)⁵

A = 10,200(0.6591)

A= $6,722.63

Answer 2

$6,722.63

Explanation:

Now: $10,200

In 1 year: 0.92 × $10,200 = $9,384

In 2 years: 0.92 × $9,384 = $8,633.28

In 3 years: 0.92 × $8,633.28 = $7,942.6176

In 4 years: 0.92 × $7,942.6176 = $7,307.208192

In 5 years: 0.92 × $7,307.208192 = $6,722.63

Answer: $6,722.63