Every year that a car is on the road it loses value. If a car loses 15 percent of its value each year and its beginning value is $24,500, what will the value of the car be after five years?

Question

$10,870.78
$10,870.78

$49,278.25
$49,278.25

$12,789.15
$12,789.15

$9240.16

Answer 1

To find the value of the car after five years, you need to apply the 15% decrease in value each year for a total of five years.

First, calculate the value of the car after the first year: $24,500 - ($24,500 * 0.15) = $20,825.

Then, calculate the value of the car after the second year: $20,825 - ($20,825 * 0.15) = $17,701.25.

Next, calculate the value of the car after the third year: $17,701.25 - ($17,701.25 * 0.15) = $15,046.06.

After that, calculate the value of the car after the fourth year: $15,046.06 - ($15,046.06 * 0.15) = $12,789.15.

Finally, calculate the value of the car after the fifth year: $12,789.15 - ($12,789.15 * 0.15) = $10,870.78.

Therefore, the value of the car after five years is $10,870.78.