Question

A car is currently worth $28000. Each year is depreciates(loses value) by 15%. What will the car be worth in 5years?

Answer 1

Worth after 5 years is `$12423.75`

Explanation:

Current worth is `C=$28000`

Depreciation rate is `D=15%`

Time in years is `T=5`

Worth (W) after 5 years : `W=C(1-D/100)^T=2800*(1-15/100)^5=$12423.75` [Ans]

Answer 2

$12,423.74(app)

Explanation:

We know the depreciation formula, `A = P(1 - r/100)^n` where A = value of the car after 5 years, P = Current value of the car, r = rate of interest and n = no. of years.

so, `A = 28,000(1 - 15/100)^5`
or, `A = 28,000 * (85/100)^5`
or, `A = 28,000 *85/100*85/100*85/100*85/100*85/100`
or, `A = [7*17*17*17*17*17]/800 = [9,938,999]/800 = 12,423.74(app)`