Question

You buy a used car for $6599. It's value decreases by 12% every year. What would be a function that represents the value (in dollars) of the car after years? What is the value of the car after 20 years?

Answer 1

$511.84

Explanation:

Use the compound amount formula: A = P(1 + r)^(t), where r is the interest rate as a decimal fraction.

A = $6599(1.00-0.12)^t

After 20 years, the value would be

A = $6599(0.88)^20 = $511.84