A vehicle purchased for $

22400
depreciates at a rate of
9
% per year.

Determine the approximate value of the vehicle
13
years after purchase.

1 answer

To calculate the approximate value of the vehicle after 13 years, we can use the formula for exponential decay:

\[ V = P(1 - r)^t \]

where:

  • \( V \) is the value of the vehicle after \( t \) years,
  • \( P \) is the initial purchase price of the vehicle,
  • \( r \) is the depreciation rate,
  • \( t \) is the time in years.

In this case:

  • \( P = 22400 \)
  • \( r = 0.09 \)
  • \( t = 13 \)

Now we can substitute these values into the formula:

\[ V = 22400(1 - 0.09)^{13} \]

Calculating \( (1 - 0.09) \):

\[ 1 - 0.09 = 0.91 \]

Now raise \( 0.91 \) to the power of 13:

\[ 0.91^{13} \approx 0.338 \]

Now multiply this by the initial value \( P \):

\[ V \approx 22400 \times 0.338 \approx 7563.20 \]

Thus, the approximate value of the vehicle 13 years after the purchase is $7,563.20.