SOLUTION: Amanda bought a truck for $20,000. The value of the truck depreciates by 7 percent each year. How much will the truck be worth after 6 years? Round your answer to the nearest cent

Question 1142181: Amanda bought a truck for $20,000. The value of the truck depreciates by 7 percent each year. How much will the truck be worth after 6 years? Round your answer to the nearest cent
Found 2 solutions by Theo, Alan3354:
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
the formula to use is f = p * (1 + r) ^ n

f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods

in your problem, you get:

p = 20,000
r = minus .07 per year
n = 6 years

formula becomes f = 20,000 * (1 - .07) ^ 6.

solve for f to get f = 12939.80367

round to the nearest cent to get 12939.80.

note that if you gain 7% per year, then the interest rate is positive and when you lost 7%, the interest rate is negative.

you can graph this formula as shown below.

Answer by Alan3354(69443) (Show Source): You can put this solution on YOUR website!
Amanda bought a truck for $20,000. The value of the truck depreciates by 7 percent each year. How much will the truck be worth after 6 years? Round your answer to the nearest cent
-----------
Its value is 93% of the previous year = 0.93
---> 20000*(0.93)^6 after 6 years.

RELATED QUESTIONS
Jeremy bought a new truck for $32,000. The value of the truck after t years can be... (answered by stanbon,addingup)
pleasee help me solve : a new truck that sells for $21,000 depreciates 20% each year.... (answered by RAY100)
You buy a used truck for $10,000. It depreciates at the rate of 18% each year for 5... (answered by techno)
You buy a used truck for $10,000. It depreciates at the rate of 18% each year for 5... (answered by MathLover1,kikk13)
A new truck has a value of $36000. It depreciates in value 12% each year. To the nearest... (answered by Boreal)
You buy a used truck for $10,000. It depreciates at the rate of 18% each year for 5... (answered by faceoff57,robertb)
In 2002, Bill bought a truck for $30,000. The value of the truck has been decreasing by... (answered by Theo)
How would I go about solving this question? A construction company pays $12,000 for a... (answered by Boreal)
The straight line depreciation equation for a truck is y = - 4,265x + 59,710. 9. What... (answered by Edwin McCravy)