If you pay $950,000 for a car and its value depreciates 10% per year. how much will be its worth 5 years from now?
950000 * 0.90^5
To find out the worth of the car 5 years from now, we need to calculate its annual depreciation and subtract it from the original price.
First, let's calculate the annual depreciation. The car depreciates 10% per year, so the value of the car after each year can be calculated using this formula:
Value after each year = Original value - (10% of original value)
Now, let's calculate the value of the car after each year:
Year 1: $950,000 - (10% of $950,000) = $950,000 - ($950,000 * 0.1) = $950,000 - $95,000 = $855,000
Year 2: $855,000 - (10% of $855,000) = $855,000 - ($855,000 * 0.1) = $855,000 - $85,500 = $769,500
Year 3: $769,500 - (10% of $769,500) = $769,500 - ($769,500 * 0.1) = $769,500 - $76,950 = $692,550
Year 4: $692,550 - (10% of $692,550) = $692,550 - ($692,550 * 0.1) = $692,550 - $69,255 = $623,295
Year 5: $623,295 - (10% of $623,295) = $623,295 - ($623,295 * 0.1) = $623,295 - $62,329.50 = $560,965.50
Therefore, after 5 years, the car will be worth $560,965.50.