Question

Doug bought land for $8000 in 2015. Its value decreased at a rate of 2.5% per year. How much was the land worth, to the nearest dollar, in 2020?

A)$7048
B) $7049
C) $9050
D) $9051

Answer 1

The land would be worth approximately $7088 in 2020.

Step-by-step explanation:

To find the value of the land in 2020, we need to calculate its worth after 5 years. Since the value decreases at a rate of 2.5% per year, we can calculate the final value by multiplying the original value by (1 - rate) raised to the power of the number of years.

Using this formula, the final value of the land in 2020 would be:

Final Value = $8000 * (1 - 2.5%)^5

Calculating the equation:

Final Value = $8000 * (0.975)^5

Final Value = $8000 * 0.886

Final Value ≈ $7088

Therefore, the land would be worth approximately $7088 in 2020. So, the answer is option A) $7048.