Today a car is valued at $42000. the value is expected to decrease at a rate of 8% each year. what is the value of the car expected to be 6 years from now.
Depreciation at 8% per year means it retains (100% - 8%) = 92% of it's value. We set up our depreciation function D(t), where t is the number of years from right now.
D(t) = $42,000(0.92)^t
The problem asks for D(6):
D(6) = $42,000(0.92)^6
D(6) = $42,000(0.606355)
D(6) = $25,466.91
Depreciation at 8% per year means it retains (100% - 8%) = 92% of it's value. We set up our depreciation function D(t), where t is the number of years from right now.
D(t) = $42,000(0.92)^t
The problem asks for D(6):
D(6) = $42,000(0.92)^6
D(6) = $42,000(0.606355)
D(6) = $25,466.91