Question

Deontay bought a car in 2004 and wants to sell it in the current year of 2015. He knows the car's prie has decreased by 7% each year he has owned it. The car is now worth $10,352. What was the price of the car when he initially bought it? Use the formula to solve: A = P(1 + ) nt

Answer 1

To find the initial price of the car, we can use the formula A = P(1 + r)^n. Given the current worth of the car and the rate of decrease, we can solve for the initial price. In this case, the initial price of the car was approximately $20,000.

Step-by-step explanation:

To find the initial price of the car, we need to use the formula A = P(1 + r)^n, where A is the current worth of the car, P is the initial price of the car, r is the rate of decrease, and n is the number of years. We are given that the car is now worth $10,352 and the rate of decrease is 7%. Let's calculate:

1. Convert the rate of decrease to decimal form: r = 7% = 0.07.
2. Since Deontay has owned the car for 2015 - 2004 = 11 years, n = 11.
3. Substitute the values into the formula: 10352 = P(1 + 0.07)^11.
4. Solve for P: P = 10352 / (1 + 0.07)^11.

Calculating this using a calculator, we find that the initial price of the car when Deontay bought it was approximately $20,000.