To calculate the value of the car after 5 years, we can use the formula for compound interest, which is:
A = P(1 - r/n)^(nt)
Where:
A = the final amount (value of the car after 5 years)
P = the initial principal (purchase price of the car, $15,000)
r = the interest rate per year (rate of depreciation, 15% or 0.15 in decimal form)
n = the number of times interest is compounded per year (assuming once per year, n = 1)
t = the number of years (in this case, t = 5)
Substituting the given values into the formula, we get:
A = $15,000(1 - 0.15/1)^(1*5)
Simplifying further:
A = $15,000(1 - 0.15)^5
To find the value of the car when your father is ready to trade, we need to calculate A.