Question

The value of a dirt bike decreases by 15% 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?

Answer 1

Right now the dirt bike is worth $500. Next year it will be worth 15% less, or 85% of the current value (because currently it's at 100%, so you would subtract the 15%). To find 85% of the dirt bike's value, you would take $500 and multiply by 85% (or 0.85). This would give you $425 after 1 year. You'd take $425 and multiply that by 85% for the next year, and continue until you reached 5 years of the value decreasing. Does this help?