The value of a dirt bike decreases by 30% each year. If you purchased this dirt bike today for $500, to the nearest dollar how much would the bike be worth 5 years later?

Question

anonymous · Answer

I'm rusty on this but I believe it's right.
$$$500(.7)^5=$84.04$$

anonymous · Answer

thank uuu!!!!!

luffingsails · Answer

year 0, value = $500

after 1 year, the value has decreased by 30%,

30% of $500 = .30 x 500 = 150, so the value has decreased by $150 in the first year. This means that the bike is worth $350 at the end of the first year.

after 2 years, the value decreases another 30%

30% of $350 = .30 x 350 = 105, so the value has decreased by $105 in the second year. This means at the end of the second year, the value is $245.

You can continue to do this iteration but there is also an equation for depreciation (which is what this is).

value = Cost * (1-depreciation %)^(number of years)

anonymous · Answer

Year 1
$$$500(.7)=$350$$
Year 2
$$$350(.7)=$245$$
Year 3
$$$245(.7)=$171.5$$
Year 4
$$$171.5(.7)=$120.05$$
Year 5
$$$120.05(.7)=$84.035$$

If you look at this we're getting:
$$$500(.7)(.7)(.7)(.7)(.7)=$500(.7)^5$$

anonymous · Answer

i wish i could give u more than on e medal this helped a ton!