Question

Colton's mini-van is depreciating at a rate of 5.5% per year. He paid $22,250 for it in 2019. How much will the car be worth in 2025 to nearest cent?

Answer 1

$1584.2

Explanation:

Given data

R= 5.5%

T= 2025-- 2019= 6years

P= $22,25

Let us apply Compound interest formula

A=P(1-r)^r ------------Note negative for depreciation

A= 2225(1-0.055)^6

A= 2225(0.945)^6

A= 2225*0.712

A=$1584.2