Answer :
The value of the car after 5 years would be $23914.85
Explanation:
Given:
Worth of the new car = $50,000
Every 5 years the value depreciates by 1/2
i.e., every 5 years the value depreciates by 50%
So, we can say that every year the value depreciates by 10%
The worth of the car after 7 years would be
[tex]W = C (1 - \frac{D}{100} )^t[/tex]
where,
W is the depreciated value
C is the current value
D is the depreciation rate
t is the time
Substituting the value in the equation we get:
[tex]W = 50000( 1 - \frac{10}{100} )^7\\\\W = 50000 (\frac{9}{10} )^7\\\\W = 23914.85[/tex]
Therefore, the value of the car after 5 years would be $23914.85
