Every year that a car is on the road it loses value. If a car loses 15 percent of it value each year and its beginning value is $24,500, what will the value of the car be after five years?
A. $10,870.78
B. $49,278.25
C. $9240.16
D. $12,789.15
To find the value of the car after five years, we need to find the value after each year of depreciation.
After the first year, the car will be worth 85% of its original value: $24,500 * 0.85 = $20,825.
After the second year, the car will be worth 85% of its second-year value: $20,825 * 0.85 = $17,701.25.
After the third year, the car will be worth 85% of its third-year value: $17,701.25 * 0.85 = $15,046.06.
After the fourth year, the car will be worth 85% of its fourth-year value: $15,046.06 * 0.85 = $12,789.15.
After the fifth year, the car will be worth 85% of its fifth-year value: $12,789.15 * 0.85 = $10,870.78.
Therefore, the value of the car after five years will be $10,870.78.
The correct answer is A. $10,870.78.