The value of a dirt bike decreases by 25% each year. If you purchased this dirt bike today for $500, to the nearest dollar how much would the bike be worth 5 years later?
The value of the bike at any year n is calculated through the equation, At = (A1) x (1 - r)^n Substituting the known values, At = ($500) x (1 - 0.25)^5 = $118.65 Thus, the bike would cost only $118.65 after 5 years and the answer is letter B.
