Question

Today, a boat is valued at $45,000. The value is expected to decrease at a rate of 8.5% each year.
What is the value of the boat expected to be 3 years from now?

A.) 33,546.76
B.) 35,475.65
C.) 34,472.74
D.) 34,364.67

Answer 1

Current value of the boat = $45000

Rate at which the value decrease = 8.5%

So the value after 1 year will be = $\frac{8.5}{100}\times45000=3825$

Hence, value becomes = $45000-3825=41175$

After 2 years value will be = $\frac{8.5}{100}\times41175= 3499.875$

Hence, value becomes= $41175-3499.875=37675.125$

After 3 years the value becomes =$\frac{8.5}{100}\times37675.125=3202.385$

Hence, value becomes=$37675.125-3202.385=34472.74$

Hence the answer is option C = $34472.74