Question

mr.henry buys a car for $18,000. the value of the car decreases about 15% each year. after 4 years, what will be the value of the car? a) about $2,700 b) about $9,400 c) about $10,800 d) about $15,300

Answer 1

The value of the car after four year is $9396.108 .

Option (b) is correct i.e about $9400 .

Explanation:

The exponential decreasing function is given by

`y = a (1-r)^(t)`

Where a is the initial value , r is the rate of interest in decimal form and t is the time in years .

As given

Mr.henry buys a car for $18,000. the value of the car decreases about 15% each year. after 4 years .

a = $18000

15% is written in the decimal form .

`= (15)/(100)`

= 0.15

t = 4 years

Putting all the values in the formula

`y = 18000(1-0.15)^(4)`

`y = 18000(0.85)^(4)`

`y = 18000* 0.522006`

y = $9396.108

Therefore the value of the car after four year is $9396.108 .

Option (b) is correct i.e about $9400 .