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Answer:
Your answer would be $4,406.56
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Explanation:
In order to find the answer for this problem, we would need to decrease the valuer of the boat 5 times (that would be equivalent to 5 years)
We would get the value of the boat (cost) of 8,350 and multiply it by .12, then subtract the percentage from the value. That's the long way, but I have a shorter way for you.
We would be using this equation:
p(1 - x)^y
p = Principal or starting value
x = Percentage
y = Amount of years
Now, we plug in the given information from the question into the equation. Your equation should look like this:
8,350(1-0.12)^5
Now you solve.
You could plug it in to a calculator to get you a quicker and more accurate answer.
When you're done solving, you should get $4,406.56
The boat would be worth $4,406.56 in 5 years after a 12% decrease each year.
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