Answer: The value of the car after 7 years is $8577.77
Step-by-step explanation:
We would apply the formula for calculating exponential decay which is expressed as
A = b(1 - r)^t
where
A is the amount after time, t
b is the initial amount
r is the decay rate
t is the time
From the information given,
b = 23200
r = 13.25% = 13.25/100 = 0.1325
t = 7 years
By substituting these values into the formula,
A = 23200(1 - 0.1325)^7
A = 23200(0.8675)^7
A = 8577.77
The value of the car after 7 years is $8577.77