I need help:

Question

The value of a new car decreases dramatically as soon as it leaves the dealership. Assuming that you just bought a new car with $20,000 and that it depreciates at a rate of 2% a month. How much will the car be worth in one year?

Answer 1

There are 12 months in a year. Each month it decreases by 2%. This means 98% of the original price will be remaining at the end of the first month. So to get the price of the care after one month, it would be

20000*0.98=19600

Repeat the process I just did for the remaining 11 months. Remember to use the price you get at the end of each month for the next month's calculation.

Answer 2

rather than do it 12 times, just use
20000 * 0.98^12