Question

a new car is purchased for 26,400 dollars. the value of the car depreciates at a rate of 5% per year. which equation represents the value of the car after 5 years?
answer attempt 1 out of 2

• ( v = 26,400(0.95)^{5} )
• ( v = 26,400(1.05)^{5} )
• ( v = 26,400(1 + 0.05)^{5} )
• ( v = 26,400(1 - 0.05)(1 - 0.05) )

Explanation:

Step1: Identify depreciation formula

Exponential depreciation: \( V = P(1 - r)^t \) where \( P = 26400 \), \( r = 0.05 \), \( t = 5 \)

Step2: Substitute values

\( V = 26400(1 - 0.05)^5 = 26400(0.95)^5 \)

Answer:

V = 26,400(0.95)^5