percentage math

Question

Some family friends bought a motorhome when they retired. Their motorhome cost $100,000. If it depreciates (loses value) at a rate of 5% per year, what will it be worth 8 years from now?

Answer 1

use the formula y=a(1-b)^x

y=final amount

a=initial amount

b=decay factor (depreciation factor)

x=amount of time that has passed

y=100,000(1-5%)^8

y=100,000(1-0.05)^8

y=100,000(0.95)^8

y=100,000(0.66342043128)

y=$66,342.04 is the worth of the house in 8 years