Every year that a car is on the road it loses value. If a car loses 15 percent of its value each year and its beginning value is $24,500, what will the value of the car be after five years?
To find the value of the car after five years, we need to calculate 15 percent of the beginning value each year and subtract it from the previous year's value.
Year 1: $24,500 - 15% of $24,500 = $24,500 - $3,675 = $20,825
Year 2: $20,825 - 15% of $20,825 = $20,825 - $3,123.75 = $17,701.25
Year 3: $17,701.25 - 15% of $17,701.25 = $17,701.25 - $2,655.19 = $15,046.06
Year 4: $15,046.06 - 15% of $15,046.06 = $15,046.06 - $2,256.91 = $12,789.15
Year 5: $12,789.15 - 15% of $12,789.15 = $12,789.15 - $1,918.37 = $10,870.78
After five years, the value of the car will be $10,870.78.