Question

In the year 2001, a person bought a new car for $15500. For each consecutive year after that, the value of the car depreciated by 5%. How much would the car be worth in the year 2005, to the nearest hundred dollars?

Answer 1

The car would be worth approximately $13,603 in the year 2005.

Step-by-step explanation:

To calculate the value of the car in the year 2005, we need to find the value after each year of depreciation. The car's value depreciates by 5% each year, which means it retains 95% of its value each year.

Starting with a value of $15,500 in 2001, the value of the car in 2002 would be 95% of $15,500. In 2003, it would be 95% of the previous year's value, and so on.

Using this pattern, we can calculate the value of the car in 2005: $15,500 * (0.95)^4 = $13,603.25.