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Algebra

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Moderate

Applications of Exponents 8

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Depreciation is the decrease of an item's value, which can be determined using a formula similar to the one used for compound interest:

$$V = P(1-r)^{t}$$

where:

$P$ is the original value
$r$ is the depreciate rate
$t$ is the period of time
and $V$ is the new value

If a particular car you buy before you go to college costs 21,000 dollars and the depreciation rate for the​ car is around $16\%$ per year, what will the value of the car be in 4 years when you graduate from college?

A

10,455.30

B

12,787.50

C

13,955.90

D

16,755.30