The value of the car after 5 years is $12271.05
The present value of the car, PV = $16500
The rate of depreciation, r = 5.75%
r = 5.75/100
r = 0.0575
Since the car depreciates annually for 5 years:
Number of times of depreciation n = 5
The formula for the Future value of a depreciating asset is given as:
\(FV = PV(1-r)^n\)
Substitute PV = 16500, r = 0.0575, and n = 5 into the formula above:
\(FV=16500(1-0.0575)^5\\\\FV=16500(0.9425)^5\\\\FV=16500(0.7437)\\\\FV=12271.05\)
The value of the car after 5 years is $12271.05
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