Question

What is the value, after 7 years, of a 2014 Ford Mustang that originally costs $25,000.00 if it depreciates at a rate of 8% per year? Round your answer to the nearest dollar.

Answer 1

1395

Explanation:

Answer 2

Let the price = P , the years = x , depreciation rate = d and original cost = W

∴
`P = W * (1-d)^x`

when W = 25,000 , d = %8 = 0.08 and x =7

∴
`P = 25,000 * (1-0.08)^7`
P = 13,946.165 ≈ 13,946 to the nearest dollar

The price after 7 years = $13,946