A new car is purchased for 15500 dollars. The value of the car depreciates at per year. What
will the value of the car be, to the nearest cent, after 6 years?

To determine the value of the car after 6 years, we start with the initial value of $15,500 and apply the depreciation rate. The formula for depreciation is:

Value = Initial Price × (1 - Depreciation Rate) ^ Number of Years.

Plugging in the numbers:

Value = $15,500 × (1 - 0.075) ^ 6
Value = $15,500 × (0.925) ^ 6
Value ≈ $15,500 × 0.5743
Value ≈ $8,900.65.

So, the value of the car after 6 years will be approximately $8,900.65.

Did you know that car depreciation varies by make and model? For example, luxury cars often depreciate faster than economy models! This is due to factors like brand popularity and market demand. So, if you’re ever in the market for a new car, consider researching the projected depreciation rates—it could save you some serious cash in the long run!

Another interesting tidbit is that depreciation isn’t just a car thing; it applies to many assets. Businesses often use depreciation to account for the wear and tear of their equipment over time. This not only helps them keep accurate financial records but also affects tax liabilities! Understanding how depreciation works can be a game-changer for managing personal finances or running a business effectively.