Question

Matt bought a new car at a cost of $25,000. The car depreciates approximately 15% of its value each year. What will the car be worth in 10 years?

Answer 1

After 10 years, the car will be worth approximately $4,922.87.

Step-by-step explanation:

To find the value of the car in 10 years, we need to calculate the value after each year of depreciation. The car depreciates approximately 15% each year, so we can calculate the value after each year using the formula:

Value after each year = Initial value × (1 - Depreciation rate)

Using this formula, we can calculate the value of the car after 10 years:

1. Year 1: $25,000 × (1 - 0.15) = $21,250
2. Year 2: $21,250 × (1 - 0.15) = $18,062.50
3. Year 3: $18,062.50 × (1 - 0.15) = $15,353.13
4. Year 4: $15,353.13 × (1 - 0.15) = $13,050.16
5. Year 5: $13,050.16 × (1 - 0.15) = $11,092.64
6. Year 6: $11,092.64 × (1 - 0.15) = $9,428.75
7. Year 7: $9,428.75 × (1 - 0.15) = $8,014.44
8. Year 8: $8,014.44 × (1 - 0.15) = $6,812.28
9. Year 9: $6,812.28 × (1 - 0.15) = $5,790.44
10. Year 10: $5,790.44 × (1 - 0.15) = $4,922.87

Therefore, the car will be worth approximately $4,922.87 in 10 years.

Answer 2

The car will be worth $4,921.86