Suppose you want to buy a car that costs $11,800. The expected depreciation of the car is 22% each year. You take out a four year loan to pay for the car. How much will the car be worth after 4 years?

Around $4,368

Step-by-step explanation:

The initial cost is $11,800.

Each year, the new value will be 22% less than the previous year. Meaning that for each year that passes, the initial value will be multiplied by 0.78:

22% = 0.22

1 - 0.22 = 0.78

The value of the car after 4 years can thus be expressed as:

Or:

around $4,368

step-by-step explanation:

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