Question

A new car sells for $34,500. If the car depreciates at a rate of seven and a half percent each year, how much will the car be worth in five years?

Answer 1

$23356.5

Explanation:

Given data

Cost = $34,500

rate= 7.5%

Time= 5 years

The expression for the depreciation is

A= P(1-r)^t

substitute

A= 34500(1-0.075)^5

A= 34500(0.925)^5

A= 34500*0.677

A=$23356.5

Hence the worth will be $23356.5