Answer:
$ 11093
Step-by-step explanation:
Recall that the formula for compound interest is:
A = P ( 1 + r/ n ) n ( t )
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where:
A = future value
P = principal (starting) amount
r = annual interest rate, expressed as a decimal
n = number of times the interest is compounded in a year
t = number of years compound interest occurs for
1 . Start by substituting your known values into the formula. Note that the annual interest rate is − 0.15 since the car depreciates (becomes lower in value) each year.
A = 25000 ( 1 + − 0.15 1 ) 1 ( 5 )
2 . Solve for A .
A = 25000 ( 0.85 ) )5
A = 11092.63
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A ≈ $ 11093 a
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