You buy a used car for $15,000. it depreciates at the rate of 23% per year. find the value of the car for the following years. a. 1 year b. 3 years.

Hi!

The compound interest formula is:

Final amount (A)= Original Amount x 

The rate is the amount of interest.

In this question, your rate is decreasing so it is 

When measuring depreciation, the formula for compound interest changes to:

Original Amount x 

This would mean that the answer to one year would be figured out by the following equation:

15000 x  , this would bring the result out to be $11550

(the time is one as there is only one year for part A).

As for part B, the time is changed to three years so the  factor is changed to three, making the formula the following:

15000 x  which would make the answer $6848.

Hope this helped!