Question 950511
A car was purchased for $3,495 and will depreciate 20% each year. How much will the car be worth after 5 years? Max gets excited and yells out that the car will not be worth anything after 5 years. Include in this teaching assignment whether or not Max is correct. Explain why or why not. If not, find the actual percent the car would depreciate after 5 years. 
-----------------
Each year the car was worth 80% of it's previous years value.
-----------------------------------
After 5 years of depreciation the car was worth (0.8)^5*3495 
= 0.32768*3495 = $1145.24
------
Percent of depreciation = 1145.24/3495 = 32.77%
-----------------
Cheers,
Stan H.