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 dollar.

Answer 1

The resale value of a car that depreciates at 20% per year will be $7,864 after 5 years, when originally purchased for $24,000. We calculate this by using the exponential decay formula and then rounding to the nearest dollar.

Step-by-step explanation:

To find the resale value of a car after 5 years when it depreciates 20% each year, we can use the formula for exponential decay: V = P(1 - r)^t, where V is the future value, P is the initial principal balance (initial value of the car), r is the rate of depreciation, and t is the time in years.

For this car, the initial value P is $24,000, the annual depreciation rate r is 20% or 0.20, and the time t is 5 years.

Applying these values to the formula, we get:

V = $24,000(1 - 0.20)^5

V = $24,000(0.8)^5

V = $24,000(0.32768)

V = $7,864.32

After rounding to the nearest dollar, the resale value of the car after 5 years is $7,864.

Answer 2

Answer:0

The can will have no value after 5 years

Step-by-step explanation:

If it lost 20% value in the first year after 5 year is amount to 100% devalued making it worth nothing at the fifth year.

20/100*24000=$4,800 in the first year

After the first year the value will be

Therefore in five year the value will be

4800*5= $24000 devalued

Making the car zero worth