Question

The value of a car depreciates by 18% per year. Work out the current value of a car bought 4 years ago for £20,000

Answer 1

so, the car was £20,000 originally, then, what's its current value 4 years later?


`\bf \qquad \textit{Amount for Exponential Decay}\\\\ A=I(1 - r)^t\qquad \begin{cases} A=\textit{accumulated amount}\\ I=\textit{initial amount}\to &2000\\ r=rate\to 18\%\to (18)/(100)\to &0.18\\ t=\textit{elapsed time}\to &4\\ \end{cases} \\\\\\ A=2000(1-0.18)^4\implies A=2000(0.82)^4\implies A=904.24352`