Suppose a car that sells for $40,000 depreciates 10% per year. How many years would it take for the car to have a value less than $25,000

2 answers

Make the following model:

40000-400x < 25000

Plug in some numbers for x.
40000(.9)^n < 25000
.9^n < .625

take log of both sides and use log rules

n log .9 < log .625
n < 4.46 yrs

testing:
40000(.8)^4.5 = 24,897.24
40000(.9)^4 = 26244
4000(.9)^5 = 23619.60

So, I would say in 4 1/2 years