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A vehicle purchased for $27500

depreciates at a rate of
9% per year.

Determine the approximate value of the vehicle
13 years after purchase

User Ykweyer
by
8.1k points

1 Answer

5 votes

Answer:

Explanation:

To determine the approximate value of the vehicle 13 years after purchase, we can use the concept of exponential decay. The vehicle depreciates at a rate of 9% per year, which means its value decreases by 9% each year.

The formula for exponential decay is:

Value after time (V) = Initial value (V0) * (1 - r)^t

where:

V0 = Initial value (purchase price)

r = Depreciation rate (as a decimal)

t = Time in years

Given:

Initial value (V0) = $27,500

Depreciation rate (r) = 9% = 0.09

Time (t) = 13 years

Now, plug these values into the formula:

V = $27,500 * (1 - 0.09)^13

V = $27,500 * (0.91)^13

V ≈ $27,500 * 0.3535

V ≈ $9,785.75

The approximate value of the vehicle 13 years after purchase is around $9,785.75.

User Yo Momma
by
7.9k points

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