Question

The original purchase price of a car is $12,000. Each year, its value depreciates by 5%. Three years after its purchase, what is the value of the car?

$1.50

$13,891.50

$10,288.50

$10,830

Answer 1

After the first year, the value of the car is $12,000*.95 = $11,400. (.95 is the value of the car minus the 5% depreciation)

To find the value:
$12,000*.95^3 = $10,288.50

Answer 2

how would I do it with sn = a1(1-r^n) / 1- r ?