Given
The original value of a car is $15,000, and it depreciates (loses value) by 20% each year.
To find:
What is the value of the car after three years?
Explanation:
It is given that,
The original value of a car is $15,000, and it depreciates (loses value) by 20% each year.
That implies,
[tex]\begin{gathered} Value\text{ }of\text{ }the\text{ }car\text{ }after\text{ }3\text{ }years=15000\times(1-\frac{20}{100})^3 \\ =15000\times(1-\frac{1}{5})^3 \\ =7680 \end{gathered}[/tex]
Hence, the value of the car after three years is $7680.
