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A new car is purchased for 20300 dollars. The value of the car depreciates at 8.75% per year. What will the value of the car be, to the nearest cent, after 12 years?

1 Answer

2 votes

Answer:

$6,765.35.

Explanation:

Here we have to use the rate of depreciation, the initial value and the total time to find the final value with this formula


A=A_(0)(1-r)^(t)

Where
A is the final value,
A_(0) is the initial value,
r is the rate of depreciation and
t is the time.

Replacing all values, we have


A=20300(1-0.0875)^(12)


A=6765.35

Therefore, after 12 years the car will value $6,765.35.

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