A boat costs $8,350 and decreases in value by 12% per year. How much will the boat be worth after 5 years?
a
$14,715.55
b
$4,406.56
c
$8,290.00
d
$3,877.77
The value of the boat after 5 years can be calculated as follows:
Value after 1st year: $8,350 - ($8,350 * 0.12) = $7,348
Value after 2nd year: $7,348 - ($7,348 * 0.12) = $6,461.76
Value after 3rd year: $6,461.76 - ($6,461.76 * 0.12) = $5,693.84
Value after 4th year: $5,693.84 - ($5,693.84 * 0.12) = $4,995.45
Value after 5th year: $4,995.45 - ($4,995.45 * 0.12) = $4,396.56
So, the boat will be worth $4,396.56 after 5 years.
Therefore, the correct answer is b) $4,406.56.