Question

A jet ski depreciates at 11% of its original value each year. If the jet ski was $8,000 at its time of purchase, what is the value of the jet ski after 5 years? (1 point)

Answer 1

Answer:

$4,467.25

Solving:

If the jet ski depreciates at 11% of its original value each year, each year the new value will be 89% of the value the previous year.

x = the value of the jet ski

t = the number of years

x = 8000 ( 0.89 )^t

8000 ( 0.89 )^5 = 4467.2475592 = $4,467.25

Round your answer once calculated.

Answer 2

Compounded depreciation formula:

A = P(1 - r)ⁿ , where P = original price, r= rate of depreciation, n = number of years and A = actual value (after depreciation):

A= $8000(1 - 11%)⁵ = 8000(0.89)⁵ = 4,467.24 ≈$4,467