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Today, a boat is valued at $45,000. The value is expected to decrease at a rate of 8.5% each year.
What is the value of the boat expected to be 3 years from now?

A.) 33,546.76
B.) 35,475.65
C.) 34,472.74
D.) 34,364.67

Respuesta :

Current value of the boat = $45000

Rate at which the value decrease = 8.5%

So the value after 1 year will be = [tex]\frac{8.5}{100}\times45000=3825[/tex]

Hence, value becomes = [tex]45000-3825=41175[/tex]

After 2 years value will be = [tex]\frac{8.5}{100}\times41175= 3499.875[/tex]

Hence, value becomes= [tex]41175-3499.875=37675.125[/tex]

After 3 years the value becomes =[tex]\frac{8.5}{100}\times37675.125=3202.385[/tex]

Hence, value becomes=[tex]37675.125-3202.385=34472.74[/tex]

Hence the answer is option C = $34472.74

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