Using Exponential Functions

Question

A new car that sells for $18,000 depreciates 25% each year. Find the value of the car after 4 years to the nearest cent

Answer 1

Let V(t) = value of the car in t years

V(t) = 18000(1 - 0.25)^t = 18000(0.75)^t

Value in 4 years = V(4) = 18000(0.75)⁴ = $5695.31