Question

Eric bought a new car for $24,000. Each year, the car depreciates 15% in value. To the nearest dollar, how much will the car be worth in 6 years?

Hint: Create an exponential equation in the formy = a (1 – r) and then evaluate the equation at t= 6 years.
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Answer 1

$9052

Explanation:

a= starting car price

(1-r)= exponential decay

r= rate

t= # of years

Equation:

a(1-r)^t

Plug in the numbers.

a= 24000 r=15%=0.15 (1-r)= 1-0.15 = 0.85

a(1-r)^t = 24000(0.85)^6

= 24000(0.37714951562)

= 9051.588375

= 9052