Question

What is the value,after 7 years,of a 2014 Ford Mustang that orginally cost 25,000.00 if it depreciates 8% a year

Answer 1

Answer:

$13,946.17.

Step-by-step explanation:

We have been given that Ford Mustang that originally cost 25,000.00. It depreciates 8% a year. We are asked to find the value of Mustang after 7 years.

We will use exponential decay function to solve our given problem.    

An exponential decay function is in form $y=a\cdot (1-r)^x$, where,

a = Initial value,

r = Decay rate in decimal form.

Let us convert our given decay rate in decimal form.

$8\%=\frac{8}{100}=0.08$

Upon substituting our given values in above formula we will get,

$y=\ 25,000\cdot (1-0.08)^7$

$y=\ 25,000\cdot (0.92)^7$

$y=\ 25,000\cdot 0.55784660123648$

$y=\ 13,946.165030912\approx \ 13,946.17$

Therefore, the value of machine after 7 years would be $13,946.17.

Answer 2

Answer:

$13,946.17

Step-by-step explanation:

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