Answer:
£1638.40
Step-by-step explanation:
Step one:
Given data
A car costs £5000 when new
Each year the value decreases by 20%.
Step two:
let us compute the worth in the next 5 years
year 1
worth= 5000- 0.2*5000
worth= 5000-1000
worth= £4000
year 2
worth= 4000- 0.2*4000
worth= 4000-800
worth= £3200
year 3
worth= 3200- 0.2*3200
worth= 3200-640
worth= £2560
year 4
worth= 2560- 0.2*2560
worth= 2560-512
worth= £2048
year 5
worth= 2048- 0.2*2048
worth= 2048-409.6
worth= £1638.40
The person is wrong because after 5 years the car is worth £1638.40
