A car depreciates 15% per year. If it costs $30,000 new, what is it worth after 3 years?
Answer
$18423.75
How to solve it
1
Year 1: $30,000 × 0.85 = $25,500
2
Year 2: $25,500 × 0.85 = $21,675
3
Year 3: $21,675 × 0.85 = $18,423.75
Hints
Each year, it retains 85% of previous value
Calculate year by year
Multiply by 0.85 three times