The value V(t) of a $25,000 car after t years that depreciates at 25% per year is given by the formula V(t) = V0(b)t. What is the value of V0 and b, and what is the car's value after 5 years (rounded to the nearest cent)?

Hint: Use the equation b = 1 − r to determine depreciation.

Question

The value V(t) of a $25,000 car after t years that depreciates at 25% per year is given by the formula V(t) = V0(b)t. What is the value of V0 and b, and what is the car's value after 5 years (rounded to the nearest cent)?

Hint: Use the equation b = 1 − r to determine depreciation.

Vocaloid · Answer

V_0 is the initial value of the car which is already given as $25,000
b is given as 1 - r where r is the depreciation rate
so in other words, b = 1 - 0.25
after that you can plug in t = 5 into the formula to get V(t)