SOLUTION: A car depreciates by 30% the first year and 12% per year afterward. How much will a $25000 car be worth after 5 years?

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Question 225565: A car depreciates by 30% the first year and 12% per year afterward. How much will a $25000 car be worth after 5 years?
Answer by drj(1380) About Me  (Show Source):
You can put this solution on YOUR website!
A car depreciates by 30% the first year and 12% per year afterward. How much will a $25000 car be worth after 5 years?

Step 1. 30% means 0.30 and 12% means 0.12.

Step 2. Let P=25000 the initial price of car.

Step 3. Let P1=%281-0.3%29%2A25000 be dollar value of car after first year.

Step 4. Let P2=%281-.12%29%2A%281-0.3%29%2A25000 be dollar value of car after second year. Also, P3=%281-.12%29%2A%281-.12%29%2A%281-0.3%29%2A25000=%281-0.12%29%5E2%2A%281-0.3%29%2A25000 after third year

Step 5. Then P5=%281-0.12%29%5E4%2A%281-0.3%29%2A25000 be the dollar value of car after 5 years.

P5=0.88%5E4%2A.7%2A25000=10494.67

Step 6. ANSWER: The dollar value of the car after 5 years is $10,494.67.

I hope the above steps were helpful.

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And good luck in your studies!

Respectfully,
Dr J
http://www.FreedomUniversity.TV