SOLUTION: The values of most cars depreciate (decrease in value). Kristen paid $6700 for her car. It will lose 23% of its value each year. How much will her car be worth in 48 months?

Question 1155680: The values of most cars depreciate (decrease in value). Kristen paid $6700 for her car. It will lose 23% of its value each year. How much will her car be worth in 48 months?

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
value is 6700 when bought.
car loses 23% of it's value every year.
48 months divided by 12 = 4 years.
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 (years in this case)
n is the number of time periods (years in this case)
r = -.23 per year.
n = 4 years.
formula becomes f = 6700 * (1 - .23) ^ 4
solve for f to get f = 2355.253747.
that's the value of the car in 4 years.

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