Question

A car costs $22,500 and decreases by 12% each year. How much will the car be worth in 5 years?

Answer 1

We take 88% instead of 12% because at the end of each year the cost of the car is 88% of the previous year
So I did this
Let's x be the amount after n year's so
22,500*0.88^n = x

As given in the question above we have n = 5
So 22,500*0.88^5 = x
22,500*0.5277319168 = 11837.96
The car should be worth about 11837.96.

Answer 2

22,500 * .12 = $2,700 * 5 = $9,000 - 22,500 = $13,500