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A new car depreciates at a rate of 15% per year. What is the expected value of a $25,000 car after 5 years (rounded to nearest whole dollar)?

A new car depreciates at a rate of 15% per year. What is the expected value of a $25,000 car after 5 years (rounded to nearest whole dollar)?
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1 vote
A new car depreciates at a rate of 15% per year. What is the expected value of a $25,000 car after 5 years (rounded to nearest whole dollar)?

User Eadwacer
by
8.1k points

1 Answer

4 votes
V(t) = 25000*0.85^t
----
V(5) = 25000*0.85^5 = $11092.63
=$11093
User El Guapo
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