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The original value of a car is $18,000, and it depreciates (loses value) by 15% each year. What is the value of the car after three years?

The original value of a car is $18,000, and it depreciates (loses value) by 15% each year. What is the value of the car after three years?
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The original value of a car is $18,000, and it depreciates (loses value) by 15% each year. What is the value of the car after three years?

User Liorda
by
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1 Answer

4 votes
A reduction of 15% per year means 100-15=85% reducing factor.
1st year: 0.85×18000=$15300.
2nd year: 0.85×15300=$13005.
3rd year: 0.85×13005=$11054.25.
So after 3 years the value of the car is $11054.25 or $11054 to the nearest dollar.
User Fixermark
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8.0k points
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