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A family buys a car for $20,000 the value of the car decreases about 18% each year after six years the family wants to sell the car should they sell the car for $4000 explain

User Aximem
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Given in the question:

a.) A family buys a car for $20,000.

b.) The value of the car decreases about 18% each year.

c.) After six years the family wants to sell the car.

Should they sell the car for $4000?

Let's determine if the price of the car fits the recommended price using the formula below:


\text{ y = }Ad^{x^{}}

Where,

y = the recommended price of the car after 6 years.

A = price of the car when bought

d = (100% - 18%)/100 = 82/100 = 0.82

x = years of use

We get,


\text{ y = }Ad^{x^{}}
\text{ y = (\$20,000)(0.82)}^{6^{}}
\text{= (\$20,000)(0}.30400667142)
\text{ y =\$}6,080.13342848\text{ }\approx\text{ \$6,080.13}

The computed depreciated value of the car is $6,080.13.

Therefore, we recommend that they should sell the car at a higher price but not more than $6,080.13 since it's still within the recommended depreciated value.

User Tckmn
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