A vehicle purchased for $

22400
depreciates at a rate of
9
% per year.

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

Round to the nearest whole number.

1 answer

To determine the approximate value of the vehicle after 13 years given a purchase price of $22,400 and a depreciation rate of 9% per year, we can use the formula for exponential decay:

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

where:

  • \( V \) is the value after \( t \) years,
  • \( P \) is the initial value ($22,400),
  • \( r \) is the depreciation rate (9% or 0.09),
  • \( t \) is the number of years (13).

Substituting the values into the formula:

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

First, calculate \( (1 - 0.09) \):

\[ 1 - 0.09 = 0.91 \]

Next, raise 0.91 to the power of 13:

\[ 0.91^{13} \approx 0.300129 \]

Now, multiply this value by the initial price:

\[ V \approx 22400 \times 0.300129 \approx 6729.4 \]

Rounding to the nearest whole number:

\[ V \approx 6730 \]

Thus, the approximate value of the vehicle after 13 years is $6,730.