Question

An automobile purchased for $28,000 is worth $2500 after 5 years. Assuming that the car's value depreciated steadily from year to year, what was it worth at the end of the third year?

The value 3 years after it was purchased is

Answer 1

$3285.47

Explanation:

We know the value decreased by a factor of 2500/28000 after 5 years.

This means the value decreased by a factor of (2500/28000)⅕ per year.

Therefore, after 3 years, the value is

`28000(2500/28000)^(3/5) \approx 3285.47`