Question

If you bought a car at $1900 which depreciates 20% each year, what will it be worth after four years?

Answer 1

I just want to check with this one. I think it's $380.

Answer 2

I got 778.24, which equation did you use?

Answer 3

I multiplied by .20, which gave me 380.

Answer 4

Oh, well the depreciation equation is \[x=A(1-r)^t\] where A is the original cost, r is the rate of depreciation and t is the time

Answer 5

x is the value of the car after the depreciation

Answer 6

SO it should be X = 1900 (1-.20)^4?

Answer 7

Yes

Answer 8

Okay. Let me see...

Answer 9

Yeah. You're right, it is 778.24

Answer 10

Thank you.

Answer 11

No problem

Answer 12

Since you are concerned with only 4 years, you can do it "manually" like this:

Since it depreciates 20% per year, that means at the end of each year, it is worth only 80% of the value at the beginning of the year.
New value: $1900
After 1 year: 0.8 * $1900 = $1520
After 2 years: 0.8 * $1520 = $1216
After 3 years: 0.8 * $1216 = $972.8
After 4 years: 0.8 * $972.8 = $778.24

Answer 13

Its still nice to practice the equation with smaller numbers lol

Answer 14

Thank you both.