Question

Doug bought a new car for $25,000. He estimates his car will depreciate, or lose value, at a rate of 20% per year. The value of his car is modeled by the equation V = P(1 – r)t, where V is the value of the car, P is the price he paid, r is the annual rate of depreciation, and t is the number of years he has owned the car. According to the model, what will be the approximate value of his car after 4 and one-half years?

$2,500
$9,159
$22,827
$23,791

Answer 1

Explanation:

The equation actually looks like this

`V=P(1-r)^t` and filling in the info given:

`V=25,000(1-.2)^{4.5` which simplifies to

`V=25,000(.8)^{4.5`

Orders of operation tells us that we need to take care of the exponential stuff first, so

V = 25,000(.3663573) and

V = $9158.93 which rounds to what is shown as the second choice down: $9,159.

Answer 2

B

Explanation:

$9159