Question

your friend purchased a van for $37,400. the van depreciates at a rate of 11% per year. after 4 years, your friend decides to sell the van. what is the value of the van after 4 years? use this formula: $fv = pv(1 - r)^t$ enter the dollar amount rounded to the nearest cent. your answer: answer

Explanation:

Step1: Identify values

$PV = 37400$, $r=0.11$, $t = 4$

Step2: Substitute into formula

$FV=37400\times(1 - 0.11)^{4}$
$FV=37400\times(0.89)^{4}$

Step3: Calculate $(0.89)^{4}$

$(0.89)^{4}=0.89\times0.89\times0.89\times0.89 = 0.62742241$

Step4: Calculate $FV$

$FV=37400\times0.62742241\approx23465.50$

Answer:

$23465.50$