Question

chase buys a new camaro for 55,500. It will lose 15% in value per year. he would like to sell the car when it reaches 20,000. When should he sell the car.

Answer 1

Answer:

6.3 years

Step-by-step explanation:

The formula for depreciation is

$A=P(1-r)^{t}$

Where P is the initial value, A is final value, t is duration in years and r is rate in deximal point. Substituting 55, 500 for P and 20, 000 for A, 0.15 for rate, r then

$20,000=55, 500(1-0.15)^{t}\\0.85^{t}=\frac {200}{555}\\t log0.85=log 0.36\\t=6.28635230793819\ years\approx 6.3\ years$

Therefore, it requires about 6.3 years