Question

Don bought his car for $20,350. It is expected to depreciate an average of 11% each year during the first 5 years.

What will the approximate value of his car be in 5 years

Answer 1

The answer is $11,364

Answer 2

Answer: $11364

Explanation:

The exponential equation for depreciation is given by :-

`A=P(1-r)^x`, where P is the initial amount, r is the rate of deprivation in x years.

Given: The cost price of car = $20,350

The rate of depreciation =11%=0.11

To calculate the approximate value of his car be in 5 years, substitute x=5 in the above equation, we get

`A=20350(1-0.11)^5\\\\\Rightarrow A=20350(0.89)^5\\\\\Rightarrow A=11363.5609787\approx11364`

Hence, the approximate value of his car be in 5 years is $11364.