Question

A $30,000 car depreciates in value 12% a year. How much will the car be worth in 5 years? A) $7465 B) $13,932 C) $15,832 D) $24,000

Answer 1

In context to question asked,

We have to determine the cost of car after 5 years.

As per question,

Present value of car = Rs. 30000

Rate = 12% depreciating

Time = 5 years

So, value of car after 5 years will be

$30000\times [(100-12)\%]^5\\30000 \times (0.88)^5\\15831.95 \approx Rs. \:15832$

Hence, value of car after 5 years will be Rs. 15832