Given:
Original cost of car = $21000
Rate of depreciation = 15% = 0.15
Time = 5 years
To find:
The value of car after 5 years.
Solution:
Consider the model for car depreciation is
[tex]V=C(1-r)^t[/tex]
where, C is the original cost, V is the value of the car after t years, and r is the rate of depreciation.
Substitute C=21000, r=0.15 and t=5 in the above model.
[tex]V=21000(1-0.15)^5[/tex]
[tex]V=21000(0.85)^5[/tex]
[tex]V=21000(0.4437)[/tex]
[tex]V=9317.7[/tex]
[tex]V\approx 9318[/tex]
The value of car after 5 years is $9318. Therefore, the correct option is C.
