Question

5. Kathy plans to purchase a car that

depreciates (loses value) at a rate of 14% per
year. The initial cost of the car is $21,000.
How much will the car be worth
in 6 years?

Answer 1

3360

Explanation:

Find 14% of 21,000 then multiply by six which gives you 17,640. Then you subtract 21,000-17640. that is your answer.

Answer 2

At the end of the 1st year you have 21,000-0.14(21000)

= (1-0.14)21000 = 0.86(21,000)

So after three years you have 21000(0.86)(0.86)(0.86)

= 21000(0.86)^3