Question

A boat costs $18,550 and decreases in value by 9% per year. How much will the boat be worth after 8 years?

A. $7,938.10

B. $36,962.04

C. $18,478.00

D. $8,723.18

Answer 1

$8723.18 Option D

Explanation:

9 % = 0.09

A decrease of 0.09 per year means that after each year the value is (1 - 0.09) = 0.91 of the previous year.

So we have the equation:- Value after x years = 18,550(0.91)^x

After 8 years value of the boat = 18,550(0.91)^8

= $8723.18