Question

Ben buys a car for $50,000. The value of the car decreases at a rate of 4% per year. How much will the car be worth in 3 years? A. $48,000 B. $44,237 C. $45,082 D. $43,270

Answer 1

Given that the value of $50000 car decreases by 4% per year, the value after 3 years will be given by exponential form:
y=abˣ
where:
a=initial value
b=decreasing rate
x=time in years
from the information:
a=50000, b=0.96, x=3
thus
y=50000(0.96)³
simplifying we get:
y=$44, 236.8
~$44237

Answer:
B. $44,237