Question

A new car is purchased for 24500 dollars. The value of the car depreciates at 14.75% per year. What will the value of the car be, to the nearest cent, after 14 years?

Answer 1

Here we can use the formula for compound interest

Value of car = 24500 $(1 - 0.1475)^{14}$

                     =$ 2 623.54

Answer 2

Given:

Price of the car = $ 24,500

Depreciation Rate = 14.75%

To Find:

The value of the car after 14 years

Formula:

$\text{Price after depreciation } = P(1 - \dfrac{r}{100})^n$

Solution

Find the price of the car after 14 years:

$\text{Price after 14 years} = 24500(1 - \dfrac{14.75}{100})^{14}$

$\text{Price after 14 years} = 24500(0.8525)^{14}$

$\text{Price after 14 years} = \ \:2623.54$

Answer: The price of the car will be $2623.54 after 14 years