Question

On average, a car will depreciate by about 21% of its value each year. If anew car costs $20,000, which equation can be used to find theapproximate number of years, n, the car takes to reach a value of $7,790?

Answer 1

The formula for the final value of an object after n years with decrease in cost at rate of r% per year is,

`FV=IV(1-(r)/(100))^n`

Determine the relation between initial value and final value of car.

`\begin{gathered} 7,790=20,000(1-(21)/(100))^n \\ 7,790=20,000(0.79)^n \end{gathered}`

Last option is correct.