Problema Solution
your parents decide to buy you a car on your 18th birthday. The value of the car is $21900 but depreciates 11% annually when you drive it off the lot. How much will the car cost on your 25th birthday?
Answer provided by our tutors
P = $21,900
r = 0.11 or 11%
t = 25 - 18 = 7 years
A = the value after t years
A = P(1 - r)^t
A = 21900(1 - 0.11)^7
A = $9,686.66
on my 25th birthday the car will cost $9,686.66.