A car costs $25,750.00 and depreciates in value by 20% per year. How much will the car be worth after 5 years?
(1 point)
To find the value of the car after 5 years, we need to apply the depreciation rate of 20% for each year and subtract it from the initial value of $25,750.00.
First, we calculate the depreciation amount for each year:
Year 1: 20% of $25,750.00 = 0.20 * $25,750.00 = $5,150.00
Year 2: 20% of ($25,750.00 - $5,150.00) = 0.20 * $20,600.00 = $4,120.00
Year 3: 20% of ($20,600.00 - $4,120.00) = 0.20 * $16,480.00 = $3,296.00
Year 4: 20% of ($16,480.00 - $3,296.00) = 0.20 * $13,184.00 = $2,636.80
Year 5: 20% of ($13,184.00 - $2,636.80) = 0.20 * $10,547.20 = $2,109.44
Now, let's calculate the value of the car after 5 years:
$25,750.00 - $5,150.00 - $4,120.00 - $3,296.00 - $2,636.80 - $2,109.44 = $8,437.76
Therefore, the car will be worth $8,437.76 after 5 years.