Question

What is the value of the boat after 5 years?

Answer 1

Step-by-step explanation:

Given:

Initial Value, a= $23,000

Depreciation rate=18% or 0.18

Time in years, x = 5 years

To find the equation, we use the formula:

`\begin{gathered} y=ab^x \\ \text{where:} \\ a=\text{ initial value} \\ b=(1-r)\text{ } \\ x=\text{time} \end{gathered}`

We plug in what we know.

`\begin{gathered} y=ab^x \\ y=23,000(1-0.18)^x \\ y=23000(0.82)^x \\ \text{Plug in 5 into x} \\ y=23,000(0.82)^5 \\ y=8527.02 \end{gathered}`

Therefore, the boat would be worth $8527.02 after 5 years.