Question

A car is purchased for $24,000. After each year, the resale value decreases by 20%. What will the resale value be after 5 years?

Use the calculator provided and round your answer to the nearest

Answer 1

Answer: $7,864.32

Explanation:

First you would do 100% -20% which would give you 80% (0.8)

1st year : $24,000 x 0.8 = 19,200

Then take your answer and times it by 0.8 again until you get to the 5th year

2nd year : $19,200 x 0.8 = $15,360

3rd year : $15,360 x 0.8 = $12,288

4th year : $12,288 x 0.8 = $9,830.40

5th year : $9,830.40 x 0.8 = $7,864.32

Therefore your final answer is $7,864.32